* Questions hang over latest effort to bring peace to shafts
* South African mining unrest rooted in union turf war
* Extremely tough wage talks loom as commodity prices fall
By Sherilee Lakmidas
PRETORIA, July 3 South Africa's Association of
Mineworkers and Construction Union (AMCU) refused to sign a
government-brokered stability pact on Wednesday aimed at
defusing tensions in the mining industry ahead of tough wage
The mining companies have been shaken by unrest for the past
18 months, which is rooted in a turf war between AMCU and the
National Union of Mineworkers (NUM), a political ally of the
ruling African National Congress party.
The ANC is keen to bring stability back to the sector ahead
of elections next year, but the failure to get AMCU on board at
this stage means unrest could flare again.
Mines minister Susan Shabangu said she believed the industry
remained, "on the right track. This is part of the building
blocks for stability in the mining industry."
Gideon du Plessis, the general secretary of the Solidarity
trade union which represents mostly skilled workers, said AMCU
wanted a set of preconditions to be met before it would sign.
"It is clear is there is a problem in the mining industry,
and from our point of view AMCU is the problem. If AMCU is not
prepared to commit itself unconditionally to peace and
stability, then they are the problem," he said.
AMCU officials made no comment after leaving the meeting.
Deputy President Kgalema Motlanthe, the government's point
man on the unfolding mining crisis, played down the significance
of AMCU's not signing, telling journalists the union wanted to
consult its members first before signing.
"Investors are not interested in this document. They are
interested in a stable mining industry which operates within the
framework of the law," he said after the meeting.
Questions hang over the prospects for the latest government
effort to bring peace to the shafts after an earlier pact was
roundly ignored and as worker militancy rises, commodity prices
fall and company margins are squeezed.
More than 50 people were killed in mining unrest last year,
which cost gold and platinum producers billions of dollars in
lost output and led to downgrades of South African sovereign
President Jacob Zuma and the government were widely
criticised for their handling of the unrest, in which police
shoot dead 34 striking miners in a single incident at the
Marikana mine of platinum producer Lonmin.
The industry is now on edge on a range of fronts.
AMCU has emerged as the dominant union in the platinum belt
- home to 80 percent of known reserves, a trillion dollar
resource - and its members could down tools again at Lonmin over
its failure to reach a recognition agreement with the company.
Wage talks in the gold sector start next week, and NUM is
seeking a 60 percent hike for entry-level workers, which would
bring their basic wage to 8,000 rand ($810) a month. Inflation
is currently running at 5.6 percent.
Not to be outdone, AMCU, has made a "living wage" its battle
cry under its charismatic president, Joseph Mathunjwa. The union
says it is seeking an increase of 150 percent to 12,500 rand.
It has made a similar demand to Anglo American Platinum
, the world's biggest producer of the precious metal.
Low wages and wide income disparities are behind such
demands, but companies are widely seen to be in no position to
come remotely close to meeting them.
The price of gold is near three-year lows, and according to
Thomson Reuters data, major South African gold producers have
among the weakest pretax profit margins in the industry.
Harmony Gold is the hardest hit, with more than 90
percent of production in South Africa, and is keeping less than
10 percent of its total sales as pretax profit, according to
Thomson Reuters data.
Things hardly look better in platinum. Amplats has said it
aims to cut 6,000 jobs as it tries to restore profits after
falling into a loss last year, but the move that has met with a
backlash from the ANC and from labour unions, notably AMCU.