JOHANNESBURG (Business Day) -- The total cost to gold companies of the pay offers the Chamber of Mines had made on their behalf to the unions was well above the basic increase of 6%, the chamber's chief negotiator, Elize Strydom, said yesterday.
Rising input costs, including fuel, steel, chemicals and labour, have helped to erode profits gold producers could have made out of the recent substantial rise in the gold price. For South African producers, labour accounts for more than half of total costs.
The chamber, negotiating on behalf of AngloGold Ashanti, Harmony Gold and Gold Fields, began talks three weeks ago with the three gold mining trade unions, the National Union of Mineworkers (NUM), Solidarity and the United Association of SA (Uasa). They are due to meet again on Tuesday.
The NUM and Uasa have asked for a 15% increase in the basic pay, and Solidarity has asked for 20%. The chamber has offered 6%.
Strydom said that on top of this the unions asked for a 50% rise in the living-out allowance for certain categories of worker to R1500 (US$214.64) a month from R1000 (US$143.07) a month. If granted across the industry, the cost would be the equivalent of a 5% increase on the basic pay for every single employee in gold. That would have "frightening" cost implications for employers, she said.
Unions had asked for, and the chamber had offered, an increase in the basic monthly pay for lowest-paid employees to R3000 (US$429.29) from R2670 (US$382.13), which was a 12% increase. The unions also asked for an increase in the sick leave allowance to 84 days over a two-year period for all employees, as some were getting only 48 days.
The chamber had agreed to extend the 84 days over a two-year period to all employees, but Strydom said the legal minimum was 36 days over three years.
