South African gold miners go on strike

Some of the gold miners about life at Driefontein mine near Johannesburg

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Some 80,000 gold miners in South Africa have gone on a strike to call for higher pay, but their union has significantly scaled down its demands.

The National Union of Mineworkers (NUM) is now calling for a 10% wage rise, down from earlier demands for increases of up to 60% for some workers.

Workers last week rejected an offer of a 6% rise - the same as the current annual rate of inflation.

South Africa's gold industry is one of the biggest in the world.

But it has been in decline in recent years, while the platinum sector is still recovering from violence during last year's strikes.

Analysis

The gold strike will add to the pressure on South Africa's already vulnerable economy, coming on top of existing strikes in the construction and vehicle manufacturing industries.

Mining industry officials say the gold sector stands to lose output worth more than $30m (£20m) each day, and the National Union of Mineworkers has talked of the strike potentially lasting until Christmas.

Mining Minister Susan Shabangu said a protracted strike would impact negatively on the economy and the two sides in the dispute needed to "find each other soon".

South Africa's share of global gold production has fallen sharply over the years and in the run-up to the strike, mining employers have given stark warnings of an industry on the path to destruction, the strike furthering the risk of mine closures and job losses - an unwelcome prospect as South Africa moves towards an election year.

It has been estimated that the gold miners' strike could cost South Africa more than $30m (£20m) a day in lost output.

Mine owners are warning it could lead to gold mines closing and thousands of jobs being lost, following a fall in the price of gold.

They say that their production costs have increased as they have had to dig ever deeper to extract gold.

'White man's economy'

For many years, South Africa was by far the world's largest gold producer and accounted for 68% of global output in 1970, reports the AFP news agency.

It is now the 5th biggest, with just 6% of world production but mining is still the most important sector in South Africa's economy.

President Jacob Zuma has urged both sides to find a solution, saying: "A strike hurts both sides."

NUM said workers would walk out from their shifts at 18:00 local time (16:00 GMT).

It was aware of the "devastating" impact industrial action would have on the economy, the NUM said.

However, it was a "largely a white man's economy" with no benefits for poor black mineworkers, the NUM added.

Mining South Africa's riches

  • Minerals and metals account for 60% of all export revenue
  • Mining contributes close to 10% of South Africa's GDP
  • 513,211 jobs - in 2011
  • South Africa is world's biggest platinum producer, with 80% of the world's reserves
  • It has 50% of known global gold reserves

Source : South African Chamber of Mines (2012)

NUM spokesman Lesiba Seshoka had denied that a 60% pay rise demand was excessive, telling AFP: "If there are bosses that sit in air-conditioned offices earning millions a year, why can't they (miners) earn 7,000 ($700) basic a month?"

But the union's general secretary, Frans Baleni, later told the BBC that if gold companies offered a 10% increase, this would be accepted and the strike called off.

It is not clear if this position would go down well with the entire membership of the union, says the BBC's Will Ross, in Johannesburg.

The NUM represents about 64% of South Africa's 120,000 gold miners.

South Africans were shocked last year when police shot dead 34 platinum miners during an unofficial strike called by a rival union, which accused the NUM of being too close to the ANC government.

The BBC's Mike Wooldridge in Johannesburg says that with elections taking place next year, the government is hoping to contain labour unrest in the current wage bargaining season.

Strikes in the vehicle manufacturing and construction industries are already hitting South Africa's vulnerable economy, he says.

Mark Lowen explores inside a South African gold mine

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