Ore prices key in wage talks

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.