UPDATE 2-S.Africa's AMCU union wants entry-level gold miners' pay doubled

Tue Jun 25, 2013 7:31am EDT

* AMCU demands far exceed those of bigger rival NUM

* Wage talks due to start early next month

* Mining company profits squeezed as prices fall

By Ed Stoddard and Sherilee Lakmidas

JOHANNESBURG, June 25 (Reuters) - South Africa's AMCU mining union is demanding gold mining companies more than double the wages of entry-level workers, according to a document seen by Reuters on Tuesday, raising the stakes for pay talks set for early next month.

The Association of Mineworkers and Construction Union (AMCU) demands far exceed those made by the dominant National Union of Mineworkers (NUM) union, an ally of the ruling ANC party that is keen to ease tensions in the sector before elections next year.

Strikes and deadly violence have cost producers billions of dollars in lost output and led to credit downgrades for Africa's largest economy and the world's No. 1 source of platinum.

The AMCU has emerged as the dominant union on the platinum-mine belt after a turf war last with the NUM during which police shot dead 34 miners near Lonmin's Marikana mine.

The union has made fewer inroads among gold miners, representing about 17 percent of workers in that sector compared to more than 60 percent for the NUM.

AMCU boss Joseph Mathunjwa told Reuters on Tuesday he was not sure if his union would sign up on Wednesday to a mining stability pact being brokered by Deputy President Kgalema Motlanthe, chief government negotiator on the mining crisis.

This year's wage talks are widely expected to be among the toughest ever as militancy among workers coincides with falling commodity prices and shrinking company margins.

AMCU called for "entry level mininum for all underground workers to be 12,500 rand ($1,200) across all mining houses", according to the document, submitted to gold producers on Monday. That is more than double the current average minimum rate of about 5,000 rand.

NUM wants a minimum of 8,000 rand for underground workers.

South Africa's main gold producers include AngloGold Ashanti , Gold Fields and Harmony Gold.

The AMCU said on Tuesday it has not yet made its proposal to platinum mining companies.

MINERALS FOR THE PEOPLE

The union said in its submission to gold producers that "on a daily basis workers experience a declining standard of living and the dream of sharing in the wealth of the country remains a pipe dream".

"We believe therefore that the minerals of this country must now benefit the people," it said in the preamble to its demands, submitted to the Chamber of Mines.

AMCU's battle cry has been a "living wage". It has poached tens of thousands of members from NUM by tapping a vein of discontent among black workers who have seen little improvement to their lives in the two decades since apartheid ended.

Its demands to the gold producers include more than doubling the "living out allowance" - provided to miners who do not live on company premises - to 4,000 rand per month. AMCU also wants some of its workers' job categories raised, which would automatically boost their wages.

Mining boardrooms have been agreeing to pay increases above inflation for several years, putting extra pressure on profits which are being further squeezed as commodity prices sink.

Even above-inflation hikes do not go far for South African mine workers, who typically have several dependents and whose families often live in rural areas far from the mines.

Spot gold is down over 23 percent so far this year and prices are about $1,280 an ounce, a level that makes many South African shafts barely profitable.

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