Wage negotiations get underway for South Africa's gold miners
South African labor unions representing more than 94,000 employees met with major gold mining companies on Monday to discuss wage increases and other employment conditions.
The talks involve Africa’s top bullion producers AngloGold Ashanti, Sibanye Gold and Harmony Gold as well as two smaller miners. Four labor unions, representing more than 80 percent of the country’s gold workers, were included in discussions on Monday, including the two largest -- the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (AMCU).
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The NUM is reportedly seeking wage increases of 80 percent for entry level pay while the AMCU is demanding pay to more than double to US$1000 per month for entry level workers.
According to The Wall Street Journal, the average entry-level gold miners who works as deep as four kilometers underground makes just under US$495 a month.
The wage negotiations come at a time when the industry is grappling with struggling prices for the precious metal, falling production and rising operating costs. Union strikes could cause detrimental damage.
“We want to start a conversation with the leaders of organized labor and our employees that will lead to the sustainability of the gold industry for decades to come,” Graham Briggs, chief executive at Harmony Gold, said in a statement released by the Chamber of Mines.
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Last year, unions and platinum producers fought over wage increases resulting in a five-month strike, platinum output to drop 15 percent and South Africa’s economic growth falling two percent.
Gold companies can’t afford the same conclusion.
"I don't think the country can afford to lose jobs, but we can't afford to continue to operate at a loss," said Briggs.
“As leaders we need to place the viability and sustainability of our industry and the jobs it provides at the center of our discussions.”
The first round of negotiations will be held until Wednesday with three more days scheduled for next week.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.