* Gold producers, unions remain poles apart over wages
* Strike could be called as early as next week
* Auto industry strike already costing $60 mln a day
* Cost of living pressures stoke worker demands
By Ed Stoddard
JOHANNESBURG, Aug 21 Six weeks of wage talks
between South African gold producers and unions have failed to
bridge the chasm between their positions, increasing the
prospect of crippling strikes in a declining industry battling
low prices and soaring costs.
Gold mine stoppages would inflict more damage on Africa's
largest economy, which is already losing $60 million a day to a
strike by 30,000 workers in the car manufacturing sector that
accounts for 6 percent of gross domestic product.
The auto strike entered its third day on Wednesday and has
affected global carmakers operating in South Africa, including
Toyota, Ford and General Motors.
The two opposing sides in the gold sector remain poles apart
after the weeks of talks, with virtually no narrowing of the gap
between employers, whose latest offer was a 5.5 percent hike for
basic wages, and unions.
The National Union of Mineworkers (NUM), which represents 64
percent of the country's roughly 140,000 gold miners, is seeking
a basic wage for entry-level underground workers of 8,000 rand
($790) a month, a 60 percent increase.
Its more hardline rival the Association of Mineworkers and
Construction Union (AMCU), with about 17 percent of the gold
labour force, has submitted demands as high as 150 percent.
"The prospects for a strike remain big," NUM spokesman
Lesiba Seshoka told Reuters. More talks were due on Wednesday
and Monday and workers could down tools after that if the
In contrast, negotiators in the auto sector made some
movement towards bringing their positions closer. The National
Union of Metalworkers of South Africa has reduced its 20 percent
raise demand to 14 percent, compared to the 8 percent being
offered by the companies for the first year.
President Jacob Zuma and his ruling African National
Congress, criticised for their handling of violent mines unrest
last year in which more than 50 people were killed, are keen to
avert more labour strife ahead of elections next year.
South Africa's gold and platinum producers are still
recovering from a wave of wildcat strikes in 2012 rooted in a
turf war between NUM and AMCU. This cost billions of dollars in
lost output and triggered damaging sovereign credit downgrades.
But in contrast with last year, when illegal strikes spun
out of control into violence, the wage talks process this year
has followed standard legal procedures and has been generally
peaceful, although there have been sporadic murders at mines.
The gold companies, which have slightly raised their
starting offers, say the unions have shown no compromise.
"If you look at past years there has been a narrowing of the
gap by this stage in the negotiations and we have not seen that
yet," said Charmane Russell, a spokeswoman for the gold
producers which include AngloGold Ashanti, Gold Fields
, Harmony and Sibanye Gold.
Aside from a 5.5 percent increase, producers have also
offered a "gain share" which, depending on the company, could be
linked to the gold price, production, profits or cost objectives
and could add another 1 percent to a basic wage.
Inflation data released on Wednesday will do little to cool
union demands as it showed headline inflation in South Africa
accelerated to 6.3 percent in July from 5.5 percent in June.
Worryingly, food inflation rose by 6.8 percent, a trend
which eats into the income of working-class households.
The chasm between the two sides underlines growing militancy
among a black labour force that has seen few improvements in
living conditions in the two decades since apartheid ended.
But companies have little room, with labour accounting for
over 50 percent of costs and gold's spot price about 30
percent lower than the record peak of over $1,920 an ounce it
reached almost two years ago. About half of the country's shafts
are losing money at these levels, the industry says.
This spells big trouble for a South African sector that
accounted for 79 percent of world gold production in 1970.
Thomson Reuters GFMS ranked South Africa sixth in global
output in 2012, when it produced 177.8 tonnes of gold, just 6
percent of the world total. It was the country's worst year for
bullion production since 1905.
The outlook is gloomy too for talks in the platinum sector,
which also faces massive union pay hike demands just as it
grapples with rising costs and depressed prices.