Gold talks falter early

09 July 2015 - 02:18 By Reuters

The Association of Mineworkers and Construction Union walked out of gold wage talks yesterday, only the third day of negotiations. "They declared a dispute and the next step is mediation," said a spokesman for the Chamber of Mines, which is negotiating pay increases on behalf of the largest gold sector employers, including AngloGold Ashanti, Sibanye and Harmony.Three other unions remained committed to the talks, sources said.Negotiations began on Monday with the companies tabling an offer they said was part of a "new approach" necessitated by severely diminished prospects for gold on world markets.Amcu is demanding a doubling of wages in some categories and the National Union of Mineworkers, which represents 53% of miners, wants raises of as much as 80%.The companies have offered a 13% increase coupled with a share of profits and improved living and working conditions.Amcu and the NUM flatly rejected this opening gambit.Amcu asserted that it, and not the NUM, was the majority union in the sector. But an audit by the gold producers showed "little change" in the disputed membership numbers, a spokesman for the chamber said yesterday.Amcu had said its numbers far exceeded the 30% level claimed by the industry. Its demands are the highest among the unions and, if it were the majority union, any deal struck with it could be imposed on others.The companies said that 95% of the payrolls submitted by Amcu to show its numbers in the sector had grown were invalid.Gold yesterday extended its losses on world markets to touch its lowest level since March - despite a tumble in Chinese stock markets and the Greek debt crisis. Other precious metals took cues from gold, logging sharp losses.Gold, usually seen as a haven in times of financial and economic uncertainty, has failed to attract significant retail buying from such factors, due to a generally robust dollar and prospects of higher US interest rates.These would increase the opportunity cost of holding gold. Safe-haven buying seemed to have bypassed gold in favour of US treasuries and other sovereign debt, banking group HSBC said.

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