Business Maverick

BUSINESS MAVERICK

Gold Fields South Deep mine inks three-year wage hike deal with NUM and Uasa

Gold Fields South Deep mine inks three-year wage hike deal with NUM and Uasa
Mine workers walk through an underground tunnel at the South Deep gold mine operated by Gold Fields. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

South Deep mine, Gold Fields’ last operational asset in South Africa, concluded a three-year wage deal with trade unions NUM and Uasa last week. The agreement includes wage hikes of up to 8%. It remains to be seen if this will serve as a template for negotiations with other gold producers.

South Deep, a mechanised mining operation, has been first out of the door with a wage deal in recent years. It was hit in late 2018 by a sometimes violent strike by members of the National Union of Mineworkers (NUM), but unrest seems to have been nipped in the bud this year. 

“The total increase of the settlement amounts to an average increase of 6.5% a year over the three-year period,” mine owner Gold Fields said in a statement. South Africa’s Consumer Price Index (CPI) was running at 4.4% in April but economists do not expect it to quicken past 6% this year.

Rank-and-file workers will get a raise of 8% in year one and, after that, 8% or CPI, whichever is higher. Miners, artisans and officials will get a 6% hike this year and, for the next two years, 6% or CPI if it is higher.

“Given the prevailing economic climate and the bullish commodity market, the settlement reached with South Deep Gold Mine through constructive engagements sets a benchmark for other mining companies,” Franz Stehring, chief negotiator for Uasa, said in the statement.

It remains to be seen if this will be the case, with wage talks looming at Sibanye-Stillwater and Harmony Gold.

The NUM is demanding 15% across the board. Many of its members have several dependents and rising unemployment in the pandemic’s wake means more mouths for a breadwinner to feed. And gold companies are generating good cash at the moment, with the precious metal’s price  fetching just shy of $1,900 an ounce, not far off its historic highs of over $2,000 scaled last year.

It also remains to be seen how the NUM’s archrival, the Association of Mineworkers and Construction Union (Amcu), will approach the talks. Amcu members were burnt when the union launched a vicious five-month strike that ended in April 2019 with the union forced to accept the same wage deal at Sibanye that other unions had signed.

At Kusasalethu mine operated by Harmony — the scene of a vicious turf war in the past between the NUM and Amcu — the NUM claims it has been on a recruiting drive and said last week it had won recognition at the mine and been provided with office space there. This suggests Amcu’s support in the gold sector may be ebbing.

But the NUM has also lost dozens of members who were dismissed for taking part in a wildcat strike at the rebooting Blyvoor mine, which was rocked by violence, including the murder of a director who was the leader of a rival union.

This all points to bubbling unrest in the gold sector, which has played an outsized role in the history of South Africa’s political economy.

For Gold Fields, the lid on such unrest appears to be closed. The South Deep agreement means it can continue to focus on making the mine a profitable asset. Difficult geology has stymied past efforts to turn the mine around and more than R30-billion has been spent on it. At least for now, it looks like labour challenges won’t compound those of nature. DM/BM

Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Every seed of hope will one day sprout.

South African citizens throughout the country are standing up for our human rights. Stay informed, connected and inspired by our weekly FREE Maverick Citizen newsletter.