Sibanye-Stillwater raises the wage offer in an attempt to end the 45-day strike

Seeking to end the 45-day strike in its gold mining operations in South Africa, platinum and gold producer Sibanye-Stillwater last week increased its supply to R850 per month from the previous R700.

The two largest unions – the Association of Mining and Construction Workers (Amcu) and the National Union of Mine Workers (NUM) – declared a strike on March 9, keeping their demands for Rs 1,000 per month.

The smaller unions Solidarity and Uasa accepted the previous wage offer on March 14. These smaller unions account for about 10% of the total staff in gold operations.

The strike is likely to have cost the workers nearly Rs.30,000 in lost wages. Unions have yet to meet with workers to review the offer.

Richard Cox, executive vice president for operations at the group’s SA Gold, says workers lost a total of Rand 990 million to the strike. The fiscus lost 113 million rupees in pay-as-you-earn (PAYE) income taxes and salary-related taxes, while even more was forfeited in other taxes and mining royalties.

READ ALSO: The Sibanye-Stillwater strikers have already lost 950 million rupees in salary

Sibanye-Stillwater locked some 30,000 workers in its South African gold mines in early March. If accepted, the last offer will be extended to all employees of the bargaining unit regardless of trade union membership.

The group’s final settlement offer proposes to award category 4-8 workers an increase of R850 for each of the next three years, while artisan miners and officials will receive 5% annually over three years.

The offer amounts to a 7.8% increase in base salary in the first year, 7.2% in the second year, and 6.8% in the third year for category 4 entry-level employees.

Cost impact

While other mining groups rode the commodity wave and accepted fairly generous wage increases, Sibanye-Stillwater resisted a smaller increase. The 2021 annual report explains the difficult situation the group finds itself in: it paid R26.2 billion in wages and salaries to employees in the financial year 2021, compared to R23.8 billion in 2020. This is a 10% increase. , more than double the inflation of consumers.

The overall support costs of its SA gold operations increased by 8% in 2021.

The latter offer increases the wage bill of the group’s gold operations by 1 July 2023 by 1.67 billion rupees and excludes concessions made in connection with non-wage claims.

Freezing fixed costs in this way, coupled with increases in electricity costs above inflation – the two primary costs in mining – has an impact on the long-term sustainability of mines.

Veteran miners know the risks of stratospheric commodity prices. While profits are at the door, workers understandably want a cut.

It will not have escaped the attention of the unions that the group has enjoyed a 50% increase in cash from its SA platinum and gold operations to R30.3 billion in the last financial year.

The danger is that mining is a cyclical activity and any multi-year deal to raise wages to levels above inflation will come back to haunt corporate managers if commodity prices fall back on the ground.

In a statement, Cox explains that the group has decided to allocate some backlog to the striking miners to assist them with financial hardship resulting from the work stoppage.

“Our offering is fair, takes into account the inflationary cost of living, considers the sustainability of SA gold operations, and is in the interest of all stakeholders. We urge employees to carefully consider the offer we made and ensure their voices are heard. “

This article originally appeared on Moneyweb and has been republished with permission.

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