Striking mine workers, who support the National Union of Mineworkers (NUM), take part in a protest in Carletonville, in western Gauteng, South Africa, yesterday.

AFP, Reuters/Johannesburg


Thousands of South African gold miners went on strike yesterday after wage talks broke down, a union said, threatening to cause millions of dollars in lost output in the troubled sector.
Powerful labour group the National Union of Mineworkers (NUM) — which represents the bulk of affected workers — called for stoppages following its members’ rejection of a 6.5% wage hike last week.
“Our members have not clocked in for the night shift, at several mines in the Carletonville area. The strike is on,” Mbuyiseli Hibana, NUM regional secretary general told AFP.
Hibana estimated that around 14,000 miners had downed tools.
“It has officially started. There are people who have not gone underground,” Charmane Russell, a spokeswoman for gold producers grouped in the Chamber of Mines, told Reuters.
She said it was too early to give details of how many workers were supporting the strike over wages called by the country’s main mining union, NUM, or which specific mines were affected.
The gold sector stands to lose 761kg in production each day, worth around $34mn, gold industry spokeswoman Charmane Russell told AFP.
Details on how the stay-away had affected industry — which includes producers such as Harmony, AngloGold Ashanti, and Sibanye Gold — were expected later yesterday.
NUM spokesman Lesiba Seshoka said early yesterday that the strike would kick off on the 6pm (1600 GMT) shift. “We will go until Christmas,” he told AFP.
Gold workers are demanding wage increases of between 60 and 100%, denouncing company executives’ high salaries while workers live in poverty in a country with one of the world’s biggest wealth gaps.
“The pay that we are asking for is not high. It is normal and reasonable,” said Seshoka.
“If there are bosses that sit in air-conditioned offices earning millions a year, why can’t they (miners) earn 7,000 ($700) basic a month?”
The strikes will add to the pressure building on Africa’s largest economy, where at least 75,000 workers in the construction and automobile industries have downed tools since last week.
The stoppages have become a frequent occurrence during annual wage negotiations, but this year come amid sluggish growth and rampant unemployment.
“Our most important industry is in crisis and we have not yet found how to stem the tide of destruction,” said Anglo American CEO Mark Cutifani in an opinion article in Business Day newspaper.
South Africa was for decades the world’s largest gold producer, but its share of production has shrunk from 68% in 1970 to 6% of the world total last year.
Falling gold prices, a declining grade of ore and some of the world’s deepest mines are all factors that have constrained gold firms’ profits.
In part because of strikes, gold production last year fell by 12.4% to 167.2 tonnes — its lowest level in over a century — and cost the economy half a billion dollars.
But workers insist their dramatic pay demands are justified after a history of cheap black labour built the continent’s most sophisticated economy.
“It is true that there are legacy issues that we must deal with,” wrote Anglo American’s Cutifani.
But as rival unions inflate wage demands in competition for members, he warned labour leaders against creating unrealistic expectations.
“Promoting expectations above the capacity of the industry to pay is a dangerous road that may have tragic consequences for employees who do not understand how close we are to economic devastation in certain sectors,” he wrote.
Seven gold mining firms, including giants AngloGold Ashanti and Gold Fields, offered a maximum of 6.5% pay raise.
The industry’s latest offer guarantees average pay of 9,170 rand ($882) a month and profit-sharing schemes.
But the NUM’s Seshoka said the figure was misleading.
“They are combining everything, including medical aid and living out allowance,” he said.
If the downward spiral continues, the gold sector may employ only 60,000 people by 2020, according to the Chamber of Mines.
But Cutifani said it had the potential to create 260,000 jobs by then if the industry, government and labour groups could reach a workable plan.
“We could make sure we help another 2.6mn South Africans out of abject poverty, he said.”
Labour unrest since last year has left more than 50 people dead and put renewed pressure on Zuma ahead of elections next year. The rand last week slid to a four-year low.
With stoppages in auto and building sectors already hitting an economy suffering from slow growth and unemployment at 25%, strikes could cripple an industry that has produced a third of the world’s bullion but is now in rapid decline.
“A strike hurts both sides. They must find a solution,” Zuma said at a briefing with reporters in Pretoria.
His comments were echoed by Mining Minister Susan Shabangu, who said the government was willing to intervene to help both sides “find each other soon”.
“If indeed we are going to have a protracted industrial action, it will impact negatively on the economy,” she told Reuters at the presidential briefing. “If there is a need for government to intervene, we will engage the parties,” she said.
Economists say South Africa’s economy can ill afford the lost output — estimated at more than $35mn a day — from an industry shutdown in gold.
Labour and management are poles apart on wages, with the dominant NUM seeking 60% pay hikes for entry-level miners and the more hardline Association of Mineworkers and Construction Union (AMCU), pushing for 150%.
Companies say they cannot afford the hikes in the face of soaring costs and depressed prices. The industry has offered pay increases of up to 6.5%.
The president of South Africa’s Chamber of Mines, which represents major bullion producers such as AngloGold Ashanti, Gold Fields and Harmony Gold, has warned unions against building up workers’ hopes.
A turf war between NUM and AMCU erupted last year, triggering violence that killed dozens of people and unleashing a wave of wildcat strikes that rocked South Africa’s platinum and gold industries and led to sovereign credit downgrades.