Exclusive: South Africa's NUM union seeks 37 percent pay hike from gold miners over two years

JOHANNESBURG (Reuters) - South Africa’s National Union of Mineworkers (NUM) has submitted wage hike demands in the gold sector of up to 37 percent over a two year period, according to a document submitted to the Chamber of Mines seen by Reuters.

FILE PHOTO: Mine workers open the doors to the pithead at the Harmony Gold mine in Carletonville, west of Johannesburg, October 4, 2007. REUTERS/Juda Ngwenya/File Photo

The demands far exceed the current inflation rate of 3.8 percent and suggest potentially tough negotiations with companies that have been battling to contain soaring costs in the world’s deepest mines.

The document, dated April 23, says the NUM wants the basic monthly pay for entry-level underground workers to rise to 10,500 rand ($83) over the next two years, which translates into annual increases of between 15 and 18.5 percent, depending on the company.

This is less than opening demands of up to 75 percent by the NUM in previous negotiations, a sign that lower inflation and food prices may be moderating expectations. The three-year agreements reached in 2015 saw basic wage hikes of between 10 and 13 percent per year.

The total package a miner receives is higher than the basic wage as it also includes housing and other allowances.

The chamber negotiates in the gold sector on behalf of Harmony Gold, Sibanye-Stillwater, AngloGold Ashanti, and a smaller producer.

Wages account for around half of the costs in South Africa’s gold mining industry and companies have in the past said the cycle of double-digit, above-inflation pay hikes cannot be sustained, unless prices rise considerably.

Unions say wages remain too low, a legacy of apartheid when the black mining labour force was ruthlessly exploited. The NUM has also said its average member typically has eight dependants, straining their ability to provide for their households and fueling their demands.

Negotiations should kick off in June and other unions still have to submit their demands, but the NUM said it wanted the talks to be complete by July 1, when the next agreements are supposed to begin.

($1 = 12.6043 rand)

Editing by Mark Potter