SOUTH AFRICA: South Africa's Zuma appeals to gold firms, unions to avoid strike

Record ID: 341193

  • Title: SOUTH AFRICA: South Africa's Zuma appeals to gold firms, unions to avoid strike
  • Date: 3rd September 2013
  • Summary: CARLTONVILLE, JOHANNESBURG, SOUTH AFRICA (AUGUST 29, 2013) (REUTERS) SHOT OF THE SUN/PAN TO MINE VARIOUS EXTERIORS OF THE SIBANYE DRIEFONTEIN GOLD MINE MAN USING HOSE OUTSIDE MINE PIPES SIGN READING: "SIBANYE GOLD. WE ARE ONE" JOHANNESBURG, SOUTH AFRICA (SEPTEMBER 03, 2013) (REUTERS) LABOUR ANALYST LOANE SHARP TALKING TO A JOURNALIST (SOUNDBITE) (English) LABOUR ANALYST,
  • Embargoed: 18th September 2013 13:00
  • Keywords:
  • Location: South Africa
  • Country: South Africa
  • Topics: Economy,Politics
  • Reuters ID: LVACYLFRWRJ8FUKM61886AXSORF4
  • Story Text: South African President Jacob Zuma on Tuesday (September 3) appealed to unions and companies in the gold industry to avoid an imminent strike that could seriously damage Africa's largest economy, force mine closures and cost thousands of jobs.


    South African President, Jacob Zuma has appealed to gold miners who are set to strike over pay on Tuesday (September 03) evening, after talks between unions and companies broke down last week.
    Economists say South Africa's economy can ill afford the lost output - estimated at more than $35 million a day - from an industry shutdown in gold.
    Loane Sharp, labour analyst at Adcorp says the labour unrest could threaten the already distressed mining operations.
    "The mines are really in a distressing situation, investment in South African mining operations in particular has been very hard hit, there are terrific uncertainties in the mining industry, there's political interference in mining company operations. All of these are bode very ill for South Africa's mining industry's long term prospect.", said Sharp
    Labour unrest since last year has left more than 50 people dead and put renewed pressure on Zuma ahead of elections next year. The rand last week slid to a four-year low.
    With stoppages in auto and building sectors already hitting an economy suffering from slow growth and unemployment at 25 percent, strikes could cripple an industry that has produced a third of the world's bullion but is now in rapid decline.
    South African President, Jacob Zuma on Tuesday (September 3) appealed to unions and companies in the gold industry to avoid an imminent strike that could seriously damage Africa's largest economy, force mine closures and cost thousands of jobs.
    "Both sides must be ready to give, they must be ready to take as well, precisely because the strike, and as you know the situation in the mining industry has not been good for quite a while. To add such powerful strikes as it looks like, I think it's not going to be helpful, so we could only appeal to all of them that let them take everything into consideration and on the basis of that and reach some understanding", said President Zuma.
    His comments were echoed by Mining Minister Susan Shabangu, who said the government was willing to intervene to help both sides.
    "I think from government side our concern is about the parties being able to find an amicable solution as soon as they can, and we also have to accept that any strike prolonged in deed will do have an impact on the economy and it will hurt us as a country.", added Shabangu.
    Labour and management are poles apart on wages, with the dominant National Union of Mineworkers (NUM) seeking 60 percent pay hikes for entry-level miners and the more hardline Association of Mineworkers and Construction Union (AMCU), pushing for 150 percent.
    "In our view we believe that we should be able to give a mining industry a very big strike, of course unfortunately this strike will mark the beginning of their end but clearly because we are not benefiting anything out of this industry we think that this strike is necessary", said NUM spokesperson, Lesiba Seshoka.
    Companies say they cannot afford the hikes in the face of soaring costs and depressed prices. The industry has offered pay increases of up to 6.5 percent.
    The president of South Africa's Chamber of Mines, which represents major bullion producers such as AngloGold Ashanti, Gold Fields and Harmony Gold has warned unions against building up workers' hopes.
    The unions seem determined to end what they see as a culture of low pay dating back to the apartheid era when impoverished black miners migrated to the industry's heartland for jobs.
    White rule ended in 1994 and the unions say miners are due a bigger share from the multi-billion-dollar industry.
    The average South African miner's monthly pay, including benefits, totalled 15,840 rand ($1,500) at the end of last year, according to government statistics. That is above the average of 14,386 rand a month for all non-farm workers.
    But South African mining companies are struggling themselves, hurt by the rising cost of extracting ore from the world's deepest mines.
    Johannesburg's index of gold mining companies has fallen 47 percent over the last 10 years, while Thomson Reuters index of Australian gold producers has risen 27 percent and a similar index of Canadian gold producers has risen 67 percent.
    Wildcat strikes have shaken the industry since early last year, coupled with outbreaks of violence linked to a turf war between the NUM and the AMCU.
    The mining crisis has triggered damaging credit rating downgrades and criticism of Zuma and his ruling African National Congress over their handling of the violence.
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