Johannesburg - Shares in South African gold mining companies dropped in early trade on Monday as investors braced themselves for the start of what could be tough wage negotiations later in the day while a faltering bullion price added the bearish sentiment.
The talks, which include Africa's top bullion producer AngloGold Ashanti, Sibanye Gold and Harmony Gold, come at a time when the industry is grappling with depressed prices, falling production and rising costs.
The firms say high pay increases would lead to the decline of a struggling industry.
However, the sector's biggest union, the National Union of Mineworkers (NUM), wants around 80 percent pay increase for its lowest-paid members while the Association of Mineworkers and Construction Union seeking a more than two-fold increase.
By 08h14 GMT, shares in AngloGold had dropped 4.7 percent to R112.26, Harmony lost 2 percent to R16.57 and Sibanye Gold shed 3.9 percent to R18.76.
David Sipunzi, newly elected head of NUM, defended his unions wage demands in the ailing industry, saying miners were still being paid “apartheid wages.”
The talks will not involve Gold Fields because it has already signed an agreement with the unions. It's shares had fallen by 2.9 percent to R38.05.
Gold eased from a near-four-week high on Monday, slipping below the $1 200 mark as possible signs of progress in Greek debt talks curbed safe-haven bids for the metal.
Reuters