South Africa’s Association of Mineworkers and Construction Union (AMCU) abruptly quit gold wage talks on Wednesday, raising the threat of strike action in a sector reeling from falling prices and rising costs.
“We declared a dispute because there is no progress,” AMCU chief negotiator Jimmy Gama told Reuters. The next step would normally be for AMCU and the producers to go to talks chaired by a government mediator.
If they fail to reach agreement, AMCU, which led a five-month stoppage last year in the platinum sector, could strike.
Alternatively, AMCU could seek its own direct talks with the employers, separate from other unions. Any strike requires a certificate from the state mediator.
Three other unions remain committed to the collective negotiations with AngloGold Ashanti, Sibanye Gold, Harmony Gold and two smaller producers.
The departure of AMCU, known for its brinkmanship, throws a spanner into the industry’s bid to work out deals simultaneously with four unions. “It’s not ideal,” the employers’ chief negotiator Elize Strydom said.
AMCU’s demands are the highest. It is seeking a more than doubling of wages for its lowest-paid members against industry offers of hikes of up to 13%.
The union is challenging membership numbers reported by a producers’ audit earlier in the day, Gama said.
The audit put membership at around 30% but AMCU says its numbers far exceed that.
According to the industry audit, the National Union of Mineworkers (NUM) is still the dominant union, representing 52% of workers employed with the companies in the talks.
The numbers matter because past deals worked out with the biggest union have been imposed on others.
AMCU has taken tens of thousands of members from the NUM in the platinum shafts in an often violent turf war, and growth in its gold numbers could point to rising tensions there.
The companies said on Tuesday that the tabled demands were “unaffordable” and would add R16.5 billion ($1.3 billion) to the sector’s wage bill.
The total wage bill in 2014 was R23.5 billion.
Underscoring the sector’s woes, gold prices remained stuck near four-month lows on Wednesday