South Africa's mining industry is being sucked into a vicious circle as labor unrest spreads from platinum to gold with steep wage demands neither sector can afford.
It is the most serious challenge since the end of white rule in 1994 to the unwritten pact at the heart of post-apartheid political and economic power: unions aligned to the ruling ANC deliver modestly higher wages for workers, while also ensuring labour stability for big business.
The anti-NUM contagion has now infected the gold sector, with 12,000 workers at Gold Fields, a quarter of its workforce, downing tools last week because of anger with their local NUM leaders, whom they want replaced.
Gold was supposed to be immune, in part because much of its workforce lives on hostels on private mine property. In the platinum sector most workers live off-site in communities around the mines where union recruiters can work freely.
Gold was also seen as shielded from militancy by the industry-wide, collective bargaining process that defines wage talks among the big producers. Platinum has a company-by-company process that has provided a gap for upstart unions to muscle in pit by pit and claim they can strike better deals.
In a research note, SBG Securities forecast downsizing at almost all South Africa's mature gold operations over the next three years in the face of "declining reserves and unrelenting inflationary pressures.". . .View Full Article