Gold miners stand firm

Yellow metal producers spurn platinum sector's settlement strategy

SOUTH African gold companies will not follow the dangerous route that platinum companies took when they negotiated with workers who were striking illegally and demanding excessive wage increases.

This was confirmed by two of the country's biggest gold-miners, AngloGold Ashanti and Gold Fields, as wildcat strikes spilled over to their operations from the platinum sector.

AngloGold Ashanti, which had an illegal strike at its Kopanong mine on Friday, said that although it had not received any formal demands from the workers, any demands would be dealt with through the Chamber of Mines bargaining forum for the gold sector.

Gold Fields spokesman Sven Lünsche said the company would not negotiate separately. Gold Fields was the first gold company to suffer fromillegal strikes at its KDC East operation last month, as strikes started spilling over from the platinum sector.

The gold miner managed to resolve the strike without any violent repercussions, only to see a second strike break out at its KDC West mine two weeks ago.

Lünsche said Gold Fields would not discuss wage and salary issues with the striking workers at the mine outside the standing bargaining agreement.

Gold companies have a wage agreement in place running from July 1 last year to June 30 next year. Gold and coal companies had been negotiating through a centralised bargaining unit, and are represented by the Chamber of Mines since 2005.

Solidarity spokesman Gideon du Plessis said he believed gold companies would stick it out as long as possible and then put out an ultimatum for workers to return to work or get sacked.

He said the fact that gold companies negotiate through a centralised bargaining unit enables them to "kick the ball to the side a bit".

Soummo Mukherjee, a vice-president at ratings agency Moody's, said South Africa's platinum sector was more vulnerable to labour unrest and wage demands than the gold sector due to differences in union membership and negotiating structures.

"The gold sector as a whole has a greater membership with the National Union of Mineworkers [NUM] with less fragmentation. It favours a more centralised bargaining process.

''This could explain the reduced occurrence of labour unrest in the gold sector when compared to the platinum sector.

"Also, the Association of Mineworkers and Construction Union [Amcu], which has been growing in membership in the platinum sector and which had an important role in the wage negotiations at Lonmin, is not prevalent among the gold companies rated by Moody's," said Mukherjee.

Platinum companies had always negotiated their salaries on a company-to-company basis, leaving room for discrepancies in workers' salaries.

It turned out to be a fatal mistake, as very violent and illegal strikes over higher wages first led to the death of six miners at Impala Platinum's (Implats) operations in Rustenburg, followed by the deaths of another 46 people at Lonmin's Marikana mine.

In the end Implats and Lonmin succumbed to demands.

On Wednesday, Lonmin announced that it would hike workers' salaries by up to 22% to put an end to the six-week strike - a big promise at a time when platinum companies are tightly squeezed by low platinum prices and high costs.

The world's foremost platinum producer, Anglo American Platinum (Amplats), still battles with an illegal strike at its Rustenburg operations. Amplats set an ultimatum for workers to return to work by tomorrow.

Du Plessis warned that Lonmin had set some dangerous precedents in dealing with the illegal strikes.

"Lonmin opened negotiations during a closed period and negotiated with splinter parties without recognised bargaining status. And in the end they made a very good offer that will certainly put pressure on other companies," he said.

Only hours after the agreement was signed, NUM general secretary Frans Baleni said: "Out of the unprotected action which was accomplished by violence and intimidation, a concession was made, which can be[come] ... a copycat.

"People can say: 'They did it at Lonmin, so we can go the same route and not follow the normal bargaining process as per the Labour Relations Act'," Baleni said.

Sasfin's David Shapiro said Lonmin's actions could definitely trigger similar strikes across the mining industry.

"If your neighbour gets it and you don't, you are bound to be upset. The danger is that workers now believe that unruly and violent behaviour will get you what you want. This gives the impression that contracts are not worth the paper that they are written on," said Shapiro.

However, Lonmin acting CEO Simon Scott pointed out that the company had to negotiate under extraordinary circumstances.

"We were not negotiating under normal circumstances; 46 people lost their lives," he said.

He said unions that were now criticising the company all signed the wage agreement.