Striking South African gold miners returning to work on 8% offer

More than 60,000 South African gold miners began resuming work last night following a 48-hour strike as they accepted an improved, above-inflation pay offer from companies including AngloGold Ashanti Ltd. and Sibanye Gold Ltd.

Most gold miners belonging to the National Union of Mineworkers, which represents two-thirds of the industry’s workers, accepted an 8% increase in pay for entry-level employees, spokesman Lesiba Seshoka said today by telephone.

“The workers themselves are saying they are happy,” Seshoka said. Miners at Harmony Gold Mining Co.’s sites in Free State province haven’t said whether they are satisfied with the offer, he said.

Agreeing to the proposal brings nearer the end of a two-day strike that may have cost the industry as much as 349 million rand ($34 million) a day in sales, according to the Chamber of Mines, which represents producers. NUM rival, the Association of Mineworkers and Construction Union, which represents 20% of the industry’s 107,000 workers, is yet to see the offer and is meeting tomorrow to discuss how to respond, President Joseph Mathunjwa said.

The chamber has made an offer to NUM and is awaiting feedback from the union before issuing a statement, Memory Johnstone, a spokeswoman, said by phone.

South Africa’s annual consumer price inflation rate was 6.3% in July, according to data compiled by Bloomberg.

Normal Shifts

AngloGold’s six mines reported normal shifts, according to the NUM’s Seshoka and an update posted on the chamber’s website. Two of Sibanye’s three mines are operating today and the remaining mine will resume operations this evening, spokesman James Wellsted said.

The NUM called a strike on Sept. 3 after employers failed to meet pay demands for as much as 60% more than the current 5,000 rand a month paid to entry-level workers. The AMCU is seeking 12,500 rand per month.

The chamber, negotiating on behalf of seven employers, said Aug. 29 that its offer for a 6% to 6.5% raise was final.

Gold production is still being hindered by the pay dispute. Ten of Harmony’s 11 operations continue to be affected by the strike, Marian van der Walt, a spokeswoman, said by phone. Workers at Gold Fields Ltd.’s South Deep mine aren’t yet back at work, Sven Lunsche, a company spokesman, said by phone, adding that they may report for duty later today.

Biggest Mines

Mines where the AMCU has the biggest membership continued to operate normally, the chamber said. The AMCU is the largest union at AngloGold’s Mponeng, Harmony’s Kusasalethu and Sibanye’s Driefontein. The three mines are the companies’ biggest South African operations.

The AMCU is bound to accept the wage deal agreed by NUM members at mines where it is the minority labor representative Mathunjwa said. It isn’t compelled to agree to the proposal at Mponeng, Kusasalethu and Driefontein, he said.

This week’s strike may cost the industry about 597 million rand a day in sales, lost wages, and taxes, the chamber has said.

Chris Nthite and Alan Fine, spokesmen for AngloGold, didn’t respond to requests for comment.

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