The South African rand fell to four-year lows today, as automakers join mineworkers in wildcat strikes. Additionally, the nation’s largest mining union unveiled its demand for a 60% wage increase for entry level gold and coal mine workers and a 15% wage increase for all other workers.
The National Union of Mineworkers presented their claims to the Chamber of Mines as labor negotiations are set to start this month. The proposal calls for strip mine workers to get a minimum monthly wage of R7,000 ($750), and underground miners to get R8,000 a month. The current pay scale is R4,700 and R5,000, respectively.
Representatives of gold mining companies have cited declining precious metals prices and escalating expenses as reasons that the union’s demands cannot be met. Platinum prices have fallen nearly 20% in two years, and gold is down almost 20% just since January. Mining companies have given workers raises above inflation for the last ten years, and say that with the collapse in metal prices, many mines are now running at a loss.
Leaders of the Association of Mineworkers and Construction Union (Amcu), which is in a power struggle with NUM, has threatened to “bring the country to a standstill” if their as-yet unrevealed demands are not met in this month’s labor negotiations. More than 50 people died in 2012 in violence between the two unions, with at least 34 being killed by police firing into rioting workers.
Anglo American Platinum (Amplats) recorded its first-ever loss last year due to labor violence and work stoppages hampering production amid falling platinum prices. In order to regain profitability, it proposed laying off 14,000 workers and shutting down two mine shafts. Outrage from the labor unions prompted the South African government to order Amplats to reduce the layoffs to less than half that number – 6,000 workers. Amcu has threatened to strike at all Amplats mines if any workers are laid off.
Adding another poker to the fire, some union officials are calling for the government to nationalize all mines in the country, or at least seize those mines idled by mining companies. Rhetoric like this, combined with the recent strikes and rising expenses, are stifling economic investment in the country, and devaluing the rand, according to pro-business analysts.