Striking South African gold miners have signed a pay deal to end months of often violent labour unrest that has cost the economy at least $1.2 billion, the country's main mining union and mine owners said Thursday. "The worst in the gold sector is over," National Union of Mineworkers spokesman Lesiba Seshoka told AFP. "Members have accepted a new pay structure."
The Chamber of Mines' offer, coupled with a package already on the table, will see miners get a wage increase of between 11 and 20.8 percent, depending on their role. The violent work stoppages have halted production at numerous mines in the country's vital sector, with strikers spurred on by a wage increase of up to 22 percent won by Lonmin platinum miners in August.
The Lonmin strike left more than 50 people dead, in the worst spasm of violence to hit South Africa since apartheid ended 18 years ago. Gold mine owners welcomed Thursday's deal, although it is unclear how much resistance there will be to the deal among non-NUM miners. "We're very pleased that they signed and bring all of the uncertainty and turmoil in the market to an end," Marian van der Walt, a spokeswoman for Harmony Gold, told AFP.
The agreement does not cover the platinum and coal sectors, but mine owners are starting to count the cost of what may prove to be the worst labour unrest in South Africa since the 1980s. The government estimates illegal strikes have cost the economy at least 10 billion rand ($1.2 billion, 900 million euros) already this year. "This number can be doubled if the lost procurement, wages, capital expenditure, taxes and other contributions that are not happening due to the strikes are included in the calculation," Roger Baxter of the Chamber of Mines told AFP.
Finance Minister Pravin Gordhan told parliament on Thursday the damage caused by production interruption resulted in revised growth forecast, down from 2.7 percent last year to 2.5 percent. "We say very clearly that the problems in the mining area do reflect upon our growth prospects and it's going to still take us some time to understand what the full impact on the growth is, depending how and when these strikes actually end," he said. The deal is also good news for the National Union of Mineworkers, which was left red faced last week when miners rejected a deal brokered by their leadership. "Negotiations took almost three weeks and were robust and vigorous at times," NUM secretary general Frans Baleni said.
"However, the new deal represents a major step forward for the industry as it removes an anomaly and establishes a firm basis from which to negotiate the 2013 agreement with the Chamber," he said. Several gold mining firms had resorted to mass dismissals of striking workers in an attempt to force them to return to work. That gambit appears to be paying off, but tensions remain. AngloGold Ashanti has threatened 12,000 workers could lose their jobs after failing to meet a deadline to return to work.
Gold Fields has sacked as many as 10,000, but many workers have appealed the dismissal. "It is probable the worst part of the industrial action should be over," said Dave Mohr, a chief economist at financial firm Citadel. "The only risk is that it might raise expectation in other industries that serial industrial action can get these kinds of wage increases," he said.
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