In­dus­try trou­bles laid bare as SA’s gold out­put plunges 16.2%

Cape Times - - BUSINESS REPORT - Kabelo Khu­malo

OUT­PUT data from Sta­tis­tics South Africa (Stat­sSA) laid bare the trou­bles fac­ing the gold min­ing sec­tor, indi­cat­ing that gold pro­duc­tion plunged 16.2 per­cent 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 R9 500 for en­try-level sur­face work­ers, R10 500 for en­trylevel un­der­ground min­ers and a 15 per­cent in­crease for of­fi­cials.

The union also wants a R120 daily food al­lowance and a liv­ing-out al­lowance of R3 000, and a hous­ing al­lowance of R5 000.

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

Uasa said it wanted a wage in­crease of 10.5 per­cent on ac­tual ba­sic and not on en­try rate, while Amcu has called for en­try-level salaries to in­crease to R12 500.

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 4.4 per­cent in April to 2.6 per­cent in May, a less ag­gres­sive de­cline than the 3.5 per­cent 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 2.3 per­cent year-on-year in May fol­low­ing a down­wardly re­vised 1 per­cent 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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