Gold Mining Companies: Talks to resume with gold producers unions

Gold Investment - 1 August 2011

Around $25 million is being lost per day thanks to the mining strike in South Africa. The strike is taking place while gold is hitting new highs almost every day. The South African Chamber of Commerce did announce that talks would resume on Monday August 01. Striking began late in July. While details on talks were scarce, it was felt that the two sides are drawing closer to each other regarding negotiating a settlement.

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Companies are offering a pay hike of 7-9 percent, however workers are insisting on a 14 percent increase in wages. The National Union of Mineworkers is spearheading negotiations with the mining conglomerates. Around 100, 000 workers have ceased working in an attempt to achieve this objective.

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Unions are being rather unrealistic with these demands as the increases are much higher than the current rate of inflation of 5 percent. Diamond and coalmines are affected as well as the manufacturers of chemicals. The strikes have placed the ruling African National Congress in the unenviable situation of being torn between supporting the workers and wanting to attract foreign investors. While the ruling party must be seen to be supporting the needs of its people, it has to show economic growth to attract investors and investors are not going to want to invest in countries that have workers striking at every opportunity.

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