Zuma Tells Unions, Gold Mine Management: ‘Find A Solution’

Zuma Tells Unions, Gold Mine Management: ‘Find A Solution’

South African President Jacob Zuma said the country can ill afford the $35 million a day it will cost the economy if gold miners carry out threatened strikes over wages, according to a Reuters report.

Gold miners were set to strike for higher pay starting today, after talks between unions and company management broke down last week and the rand fell to a four-year low.

Zuma appealed to unions and companies in the gold industry to avoid strikes that could seriously damage Africa’s largest economy, force mine closures and cost thousands of jobs, the report said.

More than 50 have died since the labor unrest of 2012, prompting criticism of Zuma and his ruling African National Congress over their handling of the violence. With South African unemployment at 25 percent, strikes could cripple an industry that has produced a third of the world’s bullion but is now in rapid decline, the report said.

“A strike hurts both sides. They must find a solution,” Zuma said.

“If there is a need for government to intervene, we will engage the parties,” said Mining Minister Susan Shabangu.

The dominant National Union of Mineworkers wants 60 percent pay hikes for entry-level miners. The more hardline Association of Mineworkers and Construction Union wants 150 percent raises. Companies say they face of soaring costs and depressed prices. They cannot afford the pay hikes, instead offering pay increases of up to 6.5 percent.

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Wildcat strikes have shaken the industry since early 2012, along with outbreaks of violence linked to a turf war between the two unions.

Unions say a culture of low pay dates back to the apartheid era and miners are due a bigger share from the multi-billion-dollar industry since apartheid ended in 1994.

The average South African miner’s monthly pay, including benefits, totaled $1,500 at the end of 2012, according to government statistics. That is above the average of $1,400 a month for all non-farm workers, the report said.

But South African mining companies are struggling themselves, hurt by the rising cost of extracting ore from the world’s deepest mines.

Johannesburg’s index of gold mining companies has fallen 47 percent over the last 10 years, while Thomson Reuters index of Australian gold producers has risen 27 percent and a similar index of Canadian gold producers has risen 67 percent.

The mining crisis triggered credit rating downgrades.