Sibanye-Stillwater gold mining strike enters second month

Striking workers have lost at least R16 000 so far, with no resolution yet in sight.
Spectacular results reported by mining groups in recent weeks have emboldened trade unions in their negotiations. Image: Mike Hutchings/Reuters

The nearly 30 000 striking gold miners at Sibanye-Stillwater are preparing to enter the second month without pay, having already forfeited at least R16 000 in lost pay so far.

James Wellsted, head of corporate affairs at the group, says Category 8 employees earning R684 a day have lost close to R20 000 after 29 days on strike.

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The Association of Mineworkers and Construction Union (Amcu) and National Union of Mineworkers (NUM) declared a strike at Sibanye-Stillwater’s gold mines on March 9 after nine months of fruitless negotiations.

A key sticking point is the R1 000-a-month increase over three years for entry level wages demanded by the two major unions.

Sibanye-Stillwater has made various amendments to its original offer, but has now refused to budge from its R700-a-month offer.

Longer-term impact

“The problem we have with the demand for a R1 000-a-month increase in entry level wages is the longer-term impact this has on our costs. In year three, should we agree to this demand, this adds R2.5 billion to our wage bill, and that’s unacceptable, as it will impact the sustainability of the operations and impact other stakeholders,” says Wellsted.

Sibanye-Stillwater has locked out the nearly 30 000 workers at its South African gold mines since early March, but smaller unions Solidarity and Uasa accepted the wage offer on March 14. These unions account for about 10% of the staff total in the gold operations.

Gold accounts for just 6% of group Ebitda (earnings before interest, tax, depreciation and amortisation), so the shuttering of operations will not have a significant impact on revenue in the current reporting period.

“We are looking at restarting some surface processing operations in the near future, but for now our gold mining operations are not functioning,” says Wellsted.

Negotiations happening outside central bargaining forum

Wage negotiations are normally handled by the Minerals Council, but this year the two main gold mining companies – Harmony and Sibanye-Stillwater – opted to negotiate separately outside the council’s central bargaining forum.

Harmony struck a three-year wage deal with workers in September 2021 that bumped up entry level pay from R10 478 to R13 478 by the third year.

Listen to Simon Brown’s MoneywebNOW interview with Mia Kruger of Kruger International on Sibanye-Stillwater prospects: 

Category 4 to 8 workers agreed on a R1 000-a-month wage increase for each year of the wage agreement, which also included a home ownership allowance of R2 750 to R3 240 for those falling below the qualification level for a mortgage bond.

In June 2021, Gold Fields’s South Deep gold mine reached a three-year settlement with Uasa and NUM which averages out at 6.5% over the full period of the agreement.

The difference between what Sibanye-Stillwater is offering and what workers are demanding is R3 600 a year.

Trade unions have been emboldened in their negotiations by the spectacular results reported by precious metals miners in recent weeks. Sibanye-Stillwater’s revenue hit R172.2 billion for the year to December 2021, up 35% on the previous year, with adjusted Ebitda ramping up 39% to R68.6 billion.

Read: These are the days (if you’re a miner)

The group says the offer on the table is still ahead of inflation and has urged miners to accept it.

As spectacular as the 2021 results were, Sibanye-Stillwater does not want to lock itself into a high fixed overhead when there is no certainty that the gold price will maintain its current level.

Amcu points to the R57.9 million paid in 2020 to Sibanye-Stillwater CEO Neal Froneman, which was almost double that paid in 2019. “It is … irrational that other gold players can offer reasonable pay which Sibanye claims not to afford. The fact is that they don’t care,” said Amcu in a statement.

Sibanye-Stillwater share price

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The business has to compete in the international arena, where the selling price is set by free-market forces of supply and demand, while the local input costs like electricity, rates and taxes, and labour are forced upon that business by government monopolies.

Eskom and municipalities use their monopoly powers to exploit customers, while labour unions extort businesses to pay high wages through their monopoly on the labour market. The government even use the Competition Commission to act against taxpayers while it protects government monopolies.

Labour laws prevent the operator from buying alternative labour and force that business to be a slave to the unions. Something has to give. That is why we have the highest unemployment rate in the world.

There is a huge supply of labour, but the oppressive Tripartite Alliance has destroyed the demand.

Agreed — Unfortunately we also have the highest voter idiocy rate in the world !!!
Stupid and must struggle !!!

The democracy thing in Africa only works for the few coolever politicians, the western thing is a few evolutions early. What struggle ? they have never know better so the norm it is !!!

Do union officials from AMCU and NUM still draw their pay, Ciaran?

I am sure they will refuse to draw a salary for the time of the strike out of solidarity with workers. I would expect nothing less from union officials. They are no doubt suffering with union members.

An injury to one is an injury to all.

Haha, Boepens, love the irony of that famous slogan!

But it is short of a few words at the end of it, perhaps like “but only the chosen few get the Band-aid”!

The whole lot deserve all the misery they so royally deserve !!!!

End of comments.

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