S.Africa's wounded NUM seeks big pay hikes from mining companies

JOHANNESBURG, April 29 Mon Apr 29, 2013 6:17am EDT

JOHANNESBURG, April 29 (Reuters) - South Africa's National Union of Mineworkers, which has lost tens of thousands of members in the past year to a militant rival, will demand double-digit pay hikes in wage talks this year that companies have said they can ill afford.

Wage talks across South Africa's mining sector begin in May and could be among the toughest ever with strikes a certainty given inflation, growing worker militancy and shrinking company margins as commodity prices fall.

Half of South Africa's platinum shafts are unprofitable at current prices and miners have little room to manoeuvre in gold as well due to industry costs now averaging around $1,150 an ounce.

"Demands to the Chamber of Mines will be delivered two weeks from now and the NUM will demand a double-digit pay increase as well as significant improvement in conditions of service," the NUM said in a statement on Sunday.

The NUM always starts with double-digit demands but it does so now from a vulnerable position after losing a bloody turf war in the platinum shafts to the radical Association of Mineworkers and Construction (AMCU).

Labour violence last year killed more than 50 people and led to credit downgrades for Africa's top economy.

So the NUM, having faced criticism that its leaders had grown out of touch and become too close to management, is likely to yield little ground and has signaled it will take a tough line on issues such as lay-offs.

It said it "condemned" moves by Sibanye Gold to lay off up to 3,000 workers because of an underground fire at one of its mines, despite the fact that the disaster has rendered those shafts inoperable for more than a year.

"We are challenging this. We think the fire is just an excuse," NUM General Secretary Frans Baleni told Reuters.

He declined to provide details of the demands that will be presented to the mining companies but said the NUM's members "hungry" and had given the union "a clear mandate".

The NUM's demands to the chamber will be directed at gold and coal producers which negotiate wages collectively through the chamber.

Platinum is done on a company-by-company basis but most of the miners in that sector now belong to AMCU, not NUM.

Mining companies have agreed to above-inflation wage increases, often in the double-digits, for several years but face tougher times as power and other costs soar.

Anglo American Platinum, the world's top platinum producer, is expected early this week to announce its final plan to restore profits through shaft closures and lay-offs, though it will likely have backed off from an initial target of 14,000 job cuts in the face of union and government resistance. (Editing by Jason Neely)

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