[miningmx.com] – SOUTH African gold mining executives said the Association of Mineworkers & Construction Union (AMCU) was growing its membership in the gold sector at the expense of its rival the National Union of Mineworkers (NUM).
Neal Froneman, CEO of Sibanye Gold and his opposite number at Harmony Gold, Graham Briggs said, however, that AMCU’s growing dominance was unlikely to translate into serious industrial action later this year.
South African gold producers start fresh wage negotiations from around May roughly a year after the end of AMCU’s five-and-a-half month strike in the country’s platinum sector which cost the sector an estimated R30bn in revenue.
“I do believe the presence of AMCU is growing,” said Froneman of the union’s membership at its Beatrix mine in the Free State province. Asked if he though AMCU would win majority status, he said: “Yes, I think they will get there”.
Production at Beatrix has been suspended for about a week whilst the company attempts to settle tempers at the mine following an outbreak of violence which resulted in nine injuries.
“I am confident that we will get a settlement and it’s peaceful on the ground at the moment,” said Froneman who added that tensions between the unions was more sustained among its leadership.
Said Briggs: “AMCU has definitely been growing, particularly in the West Rand in the Carletonville area. I don’t know all the numbers from Sibanye Gold, but at Kusasalethu AMCU is definitely dominating.’
Sibanye recently awarded AMCU minority status at Beatrix reflecting the fact some 20% of mine employees were members. AMCU is also the dominant union at Sibanye’s Driefontein mine on the west Rand. “When they get majority status we will recognise them,” said Froneman of Beatrix.
He added, however, there was too much “strike fatigue” for wage negotiations in the gold sector to result in prolonged production interruptions. “I actually don’t see any drawn-out strikes. There’s a lot of fatigue especially from what happened in the platinum sector last year,” he said.
“With about 20% of our costs related to Eskom, and another 55% related to wages, there’s not a lot we can do [in terms of accommodating significant wage increases] so we hope we can negotiate in an informed, mature way,” he said.
Briggs said Harmony was engaging with all shop stewards on the company’s cost structures and the marginality of its operations.
He added that the gold sector could not afford to have six months of industrial unrest similar to the platinum sector last year, while negotiating wages, and said violence was to be avoided at all costs. “Harmony is not going to tolerate violence. In 2012 we closed Kusasalethu for three months because of violence.’
Standard Bank Group Securities analyst, Adrian Hammond, said in a report earlier this year there was a much higher risk of strike action in the South African gold sector.
“We think that the rise in AMCU’s membership for the next round of wage negotiations is likely to make it difficult for the courts to extend a collective agreement between rival unions and producers, as was done last year,” said Hammond.
“If so, it could mark an unprecedented change in gold wage negotiations which, historically, have been dominated by the NUM.
“A strike by AMCU is unlikely to be as long as it was in the platinum sector. However, we believe that the low gold price, and worker appetite for striking, won’t count in AMCU’s favour,” he said.
Officially, AMCU’s gold sector membership is estimated to be about 24% from 13% two years ago. However, Hammond thought the actual figure could be closer to 30% in the South African gold sector.
