The 2020 strike season has finally arrived in South Africa’s mining sector.

The National Union of Mineworkers (NUM) said in a statement on Friday, 2 October that its members would down tools at the three companies after failing to reach wage agreements with them via talks mediated by Commission for Conciliation, Mediation and Arbitration. This paves the way for the union to embark on protected strikes at the trio. A “protected strike” means union members cannot be disciplined by the company for taking part in it.

The exact timing is unclear, but typically unions give 48-hour notice once they have the green light to hit the picket lines — so the strikes will likely begin by next week.

At diamond giant De Beers, NUM said it was demanding an 8% across the board wage increase while the company was offering 1.5%. The company said in a statement “it has so far been unable to reach a mutually agreed outcome in negotiations with the NUM over salary increases.”

In the case of Exxaro, the union said talks had collapsed and that it was demanding 7.5% while the company’s tabled offer was 5%. Citing the company’s recent dividend payout, the NUM asserted that “the company can afford to pay what the NUM is demanding in terms of wage increases and other demands”. Exxaro posted a 16% increase in earnings in its first-half 2020 results and declared an interim dividend of R2.3-billion.

In response to queries, the company said in an email that the two sides “are still engaging in discussions in respect of an amicable resolution … Our current wage offer is aligned with current mining industry trends and economic realities in the country.”

At Petra Diamonds, NUM said it was demanding a monthly wage hike of R1,000 a month while the company’s offer was 4%. It was not spelt out what R1,000 was in percentage terms. A Petra spokesperson said the company had not yet been issued with a strike notice.

“It is going to be a big, big fight,” William Mabapa, the NUM chief negotiator at the three companies, was quoted as saying in the statement. There is just no room for peanut increases.”

One of the things that have curbed union wage demands in recent years has been moderating inflation, which remains subdued in South Africa by historical standards. CPI is currently running at 3.1% while food inflation — which has a big impact on working-class households — is 3.9%. But the typical miner on average has 8 to 10 dependents, and that number has almost certainly risen if not soared because of the Covid-19 economic meltdown and mounting job losses. On top of this, a number of South African mining companies have been posting stellar results and paying hefty dividends.

This combination may fuel union demands going forward. DM/BM