Strikes, costs increased by recent wage agreements, and the possibility of Eskom hiking electricity prices add up to a bleak future facing SA’s gold mining companies, writes Legalbrief. According to a Miningmx report, the medium-term feasibility of SA’s remaining deep level gold mines had been thrown into doubt by cost headwinds, including the latest three-year wage agreements and the possibility Eskom could hike electricity costs by 15% a year. ‘Given the current macro environment, with further headwinds facing the industry on the back of Eskom’s push for a 15% electricity price hike, we are of the view that the medium-term sustainability of mining companies offering above-inflation increases are at risk,’ said Yatish Chowthee, an analyst for Macquarie, an Australian bank. The report says Chowthee’s comments come as Sibanye-Stillwater prepares for a strike by the Association of Mineworkers & Construction Union (Amcu). It says the prospect of industrial action – the second on the West Rand gold belt after members of the National Union of Mineworkers (Num) decided to down tools at Gold Fields’ South Deep more than a fortnight ago – presents significant social risks ahead of Christmas.
Nearly 14 000 workers of gold miner Sibanye-Stillwater will down tools at its SA gold operations this week, after months of wage negotiations with Amcu reached a deadlock. Mining Weekly reports that the gold miner has confirmed that Amcu members would embark on a protected strike from the evening shift today (Wednesday). Amcu represents about 43% of the 32 200 people that Sibanye employs at its SA gold operations. Amcu is demanding an increase of R1 000 a year, while some of the negotiating gold mines are offering R650 for the first year, R700 for the second year and R825 for the third year.
Sibanye CEO Neal Froneman blamed Amcu’s national leadership for the breakdown in talks, saying they intervened and stuck with their opening demands in the three-year wage negotiations, which were unaffordable.Business Day reports that the uncompromising stances of Froneman and Amcu president Joseph Mathunjwa set the stage for what could be a long strike at the gold mines of Kloof, Driefontein and Beatrix after a very difficult start to the year when 21 miners died on these mines.
Sibanye said it had made ongoing attempts to reach a fair and reasonable outcome during the negotiations with unions, reports The Times. ‘The average basic wages for category 4-8 employees have increased by more than 65% since Sibanye-Stillwater was unbundled from Gold Fields in 2013. This is significantly above inflation and represents a very real improvement in the standard of living of our employees. The current wage agreement reached with Num, Solidarity and Uasa is again well in excess of inflation, but takes the longer-term sustainability of the gold operations into consideration,’ it stated.
Sibanye-Stillwater has signed a three-year wage agreement with Num, Solidarity and Uasa for the period July 2018 to June 2021, reports Mining Weekly. Gold sector wage negotiations started in July, with Harmony Gold and Village Main Reef having reached an agreement with the unions in October and AngloGold Ashanti having reached an agreement with the unions in September.
Gold Fields, meanwhile, is having to sneak maintenance teams into its South Deep mine after protesters shot at vehicles trying to enter the site. Mining Weekly quotes company spokesperson Sven Lunsche as saying that small teams of essential workers are using secret entrances to enter the mine and sometimes have to be smuggled in during the night to pump water, monitor equipment and undertake general maintenance work. The company saidprotesters fired live ammunition at vehicles trying to enter South Deepand petrol bombs were recovered at one of the shaft entrances. But, the report says, according to Kanetso Matabane, a branch chair for the Num, which represents about 80% of the employees at the mine, workers weren’t responsible for the violence. The union’s members would press on with the strike until an agreement on job cuts was reached, he said.