Ore prices key in wage talks

Sunday Times - - BUSINESS TIMES - LUTHO MTONGANA

THE iron ore price, which has been in freefall since reach­ing a high in Fe­bru­ary, is be­hind the 7.9% drop in Kumba Iron Ore’s share price. But last year Kumba was one of the 10 best per­form­ers on the JSE, a fact that will not be for­got­ten in the cur­rent wage ne­go­ti­a­tions.

The Na­tional Union of Minework­ers (NUM), the ma­jor­ity union at Kumba, plans to make sure that the com­pany takes into con­sid­er­a­tion the good per­for­mance the com­pany ex­pe­ri­enced last year when its share price quadru­pled.

The com­pany will be re­spond­ing to the union’s de­mands this week in the sec­ond round of the ne­go­ti­a­tions. The NUM, which has 56% mem­ber­ship in Kumba’s Kolomela and Sishen op­er­a­tions, has asked for a re­duc­tion in work­ing hours per week, a ma­ter­nity al­lowance that Kumba had scrapped, and for the em­ployee share own­er­ship plan (ESOP) to be rene­go­ti­ated, among other things.

Lu­cas Phiri, NUM chief ne­go­tia­tor at Kumba Iron Ore, said the key de­mands were the ma­ter­nity leave al­lowances, the rene­go­ti­a­tion of the ESOP and to scrap the en­try level so that ev­ery worker starts at the

NUM asks for re­duc­tion in work­ing hours, ma­ter­nity al­lowance

sec­ond level of pay­ment.

An en­try level worker is paid an av­er­age of R12 800 a month which is in­clu­sive of salary, pen­sion and hous­ing. How­ever, the fig­ure ex­cludes cir­cum­stan­tial al­lowances such as shift al­lowances, over­time and standby al­lowances.

Kumba Iron Ore open pit mines em­ploys skilled work­ers com­pared to the av­er­age con­ven­tional un­der­ground mine in South Africa.

Kumba em­ploys 6 000 work­ers of which 4 100 are in the bar­gain­ing cat­e­gory, where unions will be ne­go­ti­at­ing on their be­half. The union is de­mand­ing a 16% wage in­crease or an ad­di­tional R1 310.72 a month for the low­est-paid worker.

The com­pany said that while the re­struc­tur­ing last year had gone well, it would be ne­go­ti­at­ing wages fully aware of the highly volatile iron ore price en­vi­ron­ment.

The iron ore price, which is pro­jected to fall to about $50 a tonne in the sec­ond half of the year from a peak of $100 in Fe­bru­ary, is cur­rently trad­ing at $57.79.

The last wage agree­ment was for three years and the NUM this time around wants a one-year deal.

How­ever, it is open to be per­suaded to a multi-year agree­ment if the ne­go­ti­a­tions and the set­tle­ment are favourable for work­ers.

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