After a strike at the country’s platinum mines brought a halt to output for five months during 2014, several of South Africa’s biggest gold miners may be facing the same problem in the near future. The country’s second-largest miner’s union, the Association of Mineworkers and Construction Union (AMCU), has made clear its intentions to strike for higher wages.
Making Their Point
At this juncture, there still has been no official strike or work stoppage announced. The AMCU and the thousands of workers it represents are pressing the issue in the hopes that it will result in a better outcome in a settlement. In other words, it’s a clear negotiating tactic. Nonetheless, the unions have expressed their willingness to strike if needed.
The final result of the months-long platinum strikes, for example, was an agreement for higher employee wages—especially for first-time employees, making jobs in the sector more attractive to newcomers—at the platinum mines in question over the next 3 years. In the interim, though, the country’s mining sector suffered widespread joblessness in addition to hurting the economy’s overall growth. South Africa relies heavily upon its bullion industry as a share of the country’s overall GDP.
Most participants on both sides of the negotiations are optimistic that no strike will actually come to fruition. The move does, however, place pressure on the mining companies to reach an agreement soon by adjusting or improving their offer. The Chamber of Mines is collectively representing AngloGold Ashanti (NYSE:AU; ASX:AGG; JSE:ANG), Harmony Gold Mining (NYSE:HMY; LON:HRM), and Sibanye Gold (NYSE:SBGL; JSE:SGL).
Whether or not this resolves the potentially long dispute between the sides will remain to be seen. The mining companies run the risk of a great deal of feet-dragging and obstruction on the part of the labor unions, who are largely willing to call the other side’s bluff about not raising wages. In the case of Sibanye, the firm says that all 4 major workers’ unions—including the National Union of Mineworkers (NUM), UASA and Solidarity—must sign-off on the deal before they will accept. Obviously, this could prolong the negotiation process significantly.
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