South Africa’s gold mines severely affected by strike

By bne IntelliNews September 5, 2013

The largest part of South Africa’s gold mines has been severely affected by the industrial auction that started on Tuesday (September 3), according to information by the Chamber of Mines, which represents gold producers AngloGold Ashanti, Gold Fields, Rand Uranium, Harmony Gold, Evander Gold Mine, Sibanye Gold, and Village Main Reef. Only 7 out of the 23 mines operated by the 7 gold producers were fully operational in the morning shift on Sep 4. Two of those 7 mines were operational as Pan African Resources and Village Main Reef have reached separate settlement agreements with the National Union of Mineworkers (NUM) and UASA in respect of the Evander and Tau Lekoa mines. According to gold producers' representative spokeswoman Charmane Russell, quoted by Sapa news agency, if all mines weren't in operation, that would lead to ZAR 350mn (EUR 26mn) of daily losses for producers.

Workers at South Africa’s gold mining sector downed tools after wage negotiations between trade unions and the Chamber of Mines reached deadlock, with NUM demanding pay rises of up to 60%, while the chamber has offered a hike of about 6%. NUM has said it could ease its demands somewhat but it would insist on a double-digit increase. According to NUM, the chamber has shown a willingness for further negotiations, but no talks have been scheduled yet.

The strike in the gold sector intensified the tensions in South Africa’s economy, as it added to the ongoing industrial auction in the car manufacturing, construction and airport sectors. Up to 18,000 employees in the vehicle manufacturing sector have been on strike since Aug 19 over a wage dispute, stopping production at plants owned by global car makers including BMW, Nissan, Toyota, Mercedes-Benz, Ford, and General Motors. It is estimated that the auto sector strike is costing the economy about USD 60mn per day.

South Africa was rattled in the second half of last year by a widespread wave of strikes in the mining sector, which dented economic growth and led to credit rating downgrades.

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