[miningmx.com] — A STRIKE in South Africa’s gold mining sector ended on Tuesday after a 2-year wage deal was clinched, unions and the Chamber of Mines said.
The strike against AngloGold Ashanti, Gold Fields and Harmony began last Thursday and halted output worth up to $25m a day at bullion’s current record prices.
The unions said their members would return to work on Tuesday with the night shift but it will take a day or two before the mines are back to full production.
Some 100,000 gold mine workers at the trio of companies and a junior miner downed tools on Thursday.
The companies’ share prices extended gains on the news as gold scaled new highs over $1,635.00 an ounce on growing concerns about Europe’s debt woes and anemic US growth data.
Unions had been seeking increases of 14% from the gold industry but the chamber of mines, which negotiated on behalf of the companies, said they had settled on raises of 7.5% to 10% in the two-year deal.
“We have also looked at housing allowances and living out allowances, we are very pleased with the outcome,” Frans Baleni, the general secretary of the powerful National Union of Mineworkers, told Reuters.
South African mineworkers also get housing and other non-wage benefits in their packages. Baleni said the monthly housing allowance had been raised by R120 for the next two years to R1,640.
Solidarity, one of the three unions involved, said in a statement that the deal was not set in stone and would be revisited next June if inflation was to exceed the wage hikes that had been agreed.
Economists have warned that inflation is being fuelled in part by the high-wage settlements which have become a feature of South Africa’s annual mid-year “strike season” and are eroding its investment status. Its workforce is already more expensive and less efficient than those in its emerging market peers.
SHARES, GOLD PRICE HOT
After investors pounded them last week the share prices of South Africa’s gold producers, which were already up smartly on bullion’s fresh record run, increased their gains in late afternoon trade.
Harmony led the way as its shares added over four percent while Gold Fields’ was 1.22% higher and AngloGold rose just over 1%.
Harmony had the most at stake in the strike as over 90% of its output comes from South Africa while in AngloGold’s case the country only accounts for about 40%.
The gold strike was relatively short-lived. A week-long walkout against South Africa’s main coal mines that had menaced exports and supplies to domestic power stations ended on Monday. A strike in the fuel sector lasted almost three weeks.
“Employees began returning to work this morning, the majority will return for the afternoon and night shifts today. We should be able to return to full production by Thursday,” Moeketsi Mofokeng, a spokesperson for Anglo American Thermal Coal a unit of Anglo American , said.
On the labour front, markets will now turn their attention to ongoing talks to avert strike action against Anglo American Platinum and Impala Platinum , who between them account for about two-thirds of global platinum output.
