Kumba's profit has fallen. Photo: Simphiwe Mbokazi.

Johannesburg - The National Union of Mineworkers has signed a three-year wage deal with Kumba Iron Ore which includes an increase of 18 percent for the lowest paid worker, the union said on Thursday.

“This 18 percent includes wages and benefits, like shift and housing allowances,” said NUM negotiator Lucas Phiri.

“The percent will stay the same in the second year, and in the third year it will drop to eight and nine percent.”

The deal would be effective from July 1.

In the first year of the agreement, the lowest basic salary would increase from R5795 to R6833, the housing allowance from R1356 to R1900, the monthly production bonus from R1274 to R1503, and the shift allowance from R546 to R709.

Phiri said the lowest paid worker's 18 percent will include 0.5 percent for pension.

“The NUM is on track to achieve a massive reduction in inequality of pay of workers, with the lowest paid benefiting the most,” the union said.

The agreement also outlined the phasing out of the entry level in Kumba and moving all employees to the next level, effective July 1.

Pay talks between the union and Kumba began in June. - Sapa