Johannesburg - The final wage offer tabled by gold producers last week could add as much as R5 billion to the industry’s wage bill over three years, compounding the fallout mining companies face from sliding gold prices, slowing demand and rising costs.
In their final offer presented on Thursday, gold producers offered underground workers an increase of R1 000 a month and R100 a month on their living out allowance for a year.
In terms of costs, for Harmony the offer meant increases of between 10 percent and 11 percent for the lowest paid worker.
At Sibanye Gold it meant salaries would increase by 13 percent for the lowest paid workers.
The employers had hoped that the offer would break the logjam in wage negotiations, which have dragged on for weeks.
But yesterday a spokesman for the Association of Mineworkers and Construction Union (Amcu) told Reuters that the union would reject the offer as it was inadequate.
The union would meet with the Chamber of Mines on Tuesday to officially reject the offer, he said.
AngloGold Ashanti chief executive Srinivasan Venkatakrishnan said on Friday that R1.5 billion would be added to the wage bill in the first year of the three-year agreement as per the offer last week.
Graham Briggs, the chief executive of Harmony, said in the worst case scenario where unions did not accept the offer, the companies would continue to negotiate.
“If all four unions do not agree on the offer, we will continue to negotiate. We cannot do union-by-union agreements,” Briggs said before Amcu’s decision to reject the offer. He said the offer was a “fair offer and deserves good consideration”.
The Chamber of Mines is representing the industry at the wage talks, while Amcu, the National Union of Mineworkers (NUM), Solidarity and Uasa are representing the workers.
BUSINESS REPORT