HAVING navigated the first phase of the Covid-19 pandemic, some of SA’s mining companies are facing fresh challenges after the National Union of Mineworkers (NUM) said it was embarking on wage- and benefit-related strike action.
The union announced its intention to strike at the facilities of Exxaro Resources, De Beers and Petra Diamonds. After the initial economic shock of Covid-19 lockdowns, the prices of some commodities have fared well. But for all three companies potentially affected by the strike, trading or business conditions are depressed, especially for Petra Diamonds.
The company is engaged in discussions with shareholders regarding the potential sale of the company or assets after failing to contain debt. The NUM said it had received a certificate to embark on a protected strike at Petra after the union failed to get a R1,000 wage increase for employees and parity among all the firm’s operations. In response, Petra has offered a 4% pay rise.
“There is no room for peanuts increases and for that we are prepared for war,” said William Mabapa, chief negotiator for NUM regarding the disputes at all three companies. “It’s going to be a big, big fight,” he added in sabre-rattling typical of the union.
In the case of De Beers, the NUM said it was finalising picketing rules with the Commission for Conciliation, Mediation and Arbitration (CCMA). It demanded an 8% across-the-board wage increase against which De Beers tabled a R750 improvement, equal to 1.5%. The NUM added De Beers could afford to pay the increase as diamond sales had recently risen 176%.
In fact, De Beers barely made a contribution to parent Anglo American’s interim earnings before interest, depreciation and amortisation following the suspension of several sales cycles owing to Covid-19 related travel restrictions on buyers.
De Beers reported sales of £320m in its seventh cycle, more than last year, but there was an element of market catch up due to the absence of sales in previous tenders.
Wage negotiations had “collapsed” with Exxaro Coal, said the NUM. The union is demanding a minimum wage increase of 7.5% across-the-board compared to Exxaro’s 5% increase offer. The thermal coal market is under pressure this year with export prices trading at a spot price of about $58/t, about 13% weaker year-on-year.
The NUM has also declared a dispute with Seriti Resources, a privately-owned company that bought the South African domestic coal mines of Anglo American.
