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Time to deal: NUM demands pay hikes of more than 50% in gold sector

Not lost on the National Union of Mineworkers is that wage talks come against the backdrop of surging profits for precious metals producers, which have been lifted by red-hot prices and resulted in big dividend payouts. (Photo: Naashon Zalk / Bloomberg via Getty Images)

The National Union of Mineworkers will push for salary increases that would take the entry-level wage to R15,000 over the next three years. This year’s wage negotiations include gold mining and that would represent three years’ hence a more than 50% increase on the present entry level or basic wage, which does not include the whole pay package.

The National Union of Mineworkers (NUM) unveiled its demands, formulated at its recent collective bargaining conference, at a press conference on Wednesday. The demands in gold mining, and Eskom wage talks more broadly, will aim for increases of 15% to 20%, but if agreements are only inked for one year, NUM acting general secretary William Mabapa signalled the union could settle for less. 

NUM and its rivals, notably the Association of Mineworkers and Construction Union (Amcu), often open wage talks with demands for huge increases for entry-level/category 4 underground workers. This is part of the bargaining process, and while wage agreements over the past several years have generally exceeded inflation, they are always whittled down from the initial demands.

The wage talks also come against the backdrop of surging profits for precious metals producers, which have been lifted by red-hot prices and resulted in big dividend payouts. This has not been lost on NUM.   

“The union… believes that workers should earn their equal share from these windfalls because it is the result of their hard labour… Given the good dividend performances by mining companies, NUM enters this season of negotiations in high spirit for good settlement,” the union said in a statement. 

A minimum basic pay of R15,000 over the course of three years would be a significant increase.

The last three-year wage agreement reached with Sibanye-Stillwater and Harmony Gold saw above-inflation increases for the average basic pay for entry-level/category 4 underground miners. At Sibanye, this meant the average basic monthly pay, as of 1 July 2020, was R9,532, and at Harmony, R9,612. So, R15,000 is north of a 50% rise in basic pay. 

AngloGold Ashanti no longer has operational assets in South Africa, but its wage agreements were also in this range. Gold Fields’ South Deep asset is a mechanised mine and the company has not joined the others in past wage negotiations. 

Basic pay is not the whole story. When other benefits such as living-out allowances are included, the average total cash payout at Sibanye for entry-level/category 4 employees is now about R13,000 a month. 

Medical coverage, pension contributions, bonuses, overtime pay and other benefits bring the total average monthly cost-to-company of around R19,000 a month. At Harmony, the total works out to around R21,500, according to company calculations published in 2018, when the last wage deal was reached. 

So the stage could be set for tough negotiations. Still, relations in South Africa’s mining sector between business and labour have generally — with some exceptions — been improving in recent years. 

The pandemic has been a case in point, with several companies paying wages to workers who were idled by lockdowns. There have also been big strides on the health and safety fronts, which have — perhaps indirectly — taken the sting out of union militancy. 

Inflation is also moderate, and this can have a moderating influence on demands for wages. Past wildcat and prolonged strikes which have ended in failure have also reduced the rank-and-file appetite for downing tools. 

At the same time, rising unemployment in the wake of the economic meltdown triggered by the pandemic and subsequent lockdowns has probably saddled much of the mining workforce with additional dependents. More mouths to feed will eat into a household wage. 

Union membership has also generally been in decline, so South Africa’s mining unions are competing for a shrinking base that can inject a dose of militancy into the proceedings. 

NUM’s William Mabapa, who stepped into his position after the sudden death in December of David Sipunzi, strikes a tougher tone than his late predecessor. He has a laser focus on executive pay, which he sees — many would say not unreasonably — as perpetuating wider disparities.   

NUM also reiterated its allegations of corruption, wasteful expenditure and racism against Eskom Group Chief Executive Andre de Ruyter, and said it had “undertaken a process of opening up a criminal case against the CEO”. De Ruyter has emphatically denied the allegations.  

Relations between NUM and Eskom are at an all-time low and the union’s wage talks with the troubled state-run power utility may be fraught. Winter, to quote from a popular TV series, is coming. BM/DM

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  • Let’s chase away investors in the only actual profitable sector in our country. It’s a great idea “UNIONS”. Workers Unions will be the death of the economy. Who wants a lazy, very expensive workforce? I mean really..