FILE PHOTO: A worker pours gold at the AngloGold Ashanti mine at Obuasi, Ghana
FILE PHOTO: A worker pours gold at the AngloGold Ashanti mine at Obuasi, Ghana

SA’s gold output plunges by 16.2%

By Kabelo Khumalo Time of article published Jul 13, 2018

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JOHANNESBURG - Output data from Statistics South Africa (StatsSA) laid bare the troubles facing the gold mining sector, indicating that gold production plunged 16.2percent on an annualised basis in May.

Adding pressure to the gold sector are the ongoing wage negotiations in the sector, with unions having already drawn a line in the sand over their demands.

Wage negotiations and conditions of employment in the gold sector between gold producers AngloGold Ashanti, Harmony, Sibanye-Stillwater and Village Main Reef, and representative unions Association of Mineworkers and Construction Union (Amcu), Solidarity, National Union of Mineworkers (NUM) and Uasa are ongoing.

The Minerals Council, formerly the Chamber of Mines, will make its opening offer to trade unions.

Solidarity general secretary Gideon du Plessis said salary increases and mining productivity must go hand in hand.

“The sale of AngloGold Ashanti’s mines to, among others, Harmony Gold and Village Main Reef has resulted in increased productivity at these mines, which can be attributed to a changing production method that is being followed under the supervision of the new management,” Du Plessis said.

NUM is seeking an increase to R9500 for entry-level surface workers, R10500 for entry-level underground miners and a 15percent increase for officials.

The union also wants a R120 daily food allowance and a living-out allowance of R3000, and a housing allowance of R5000.

Solidarity has demanded a consumer price index plus 4percent rise or a 10percent increase, whichever is greater for every year negotiated.

Uasa said it wanted a wage increase of 10.5percent on actual basic and not on entry rate, while Amcu has called for entry-level salaries to increase to R12500.

Livhuwani Mammburu, a NUM spokesperson, said: "As the NUM, we have always maintained that wages in the mining sector remained too low, and that was as a result of apartheid legacy, when the black mining labour force was ruthlessly exploited.”

Data from StatsSA also showed that the production in the whole mining sector moderated from 4.4percent in April to 2.6percent in May, a less aggressive decline than the 3.5percent consensus.

Escalating costs

Lara Hodes, an economist at Investec, said declining productivity, grades and escalating costs continued to weigh heavily on the local gold mining sector.

“A combination of factors have suppressed activity in the domestic mining sector, inhibiting investment, including persistent policy uncertainty, with issues around the new, proposed mining charter still unresolved,” Hodes said.

Meanwhile, activity data from StatsSA showed that the manufacturing sector recorded its biggest gain in output in May.

Manufacturing rose 2.3percent year-on-year in May following a downwardly revised 1percent increase in April and beating market expectations of a 0.6 percent fall.

John Ashbourne, an Africa economist at Capital Economics, said the new data suggested that the contraction in manufacturing output was concentrated in the first quarter and that the sector rebounded going into second quarter.


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