South Africa gold strike drawing to a close

The strike over wages in South Africa's gold mining sector appears to be drawing to a close, with producers forecasting that the majority of mines would resume operations on Friday evening.

The progress came after companies including AngloGold Ashanti, Harmony and Sibanye made an improved offer to the National Union of Mineworkers of salary increases of between 7.5 per cent and 8 per cent.

The talks hit a deadlock last week after producers insisted that a 6.5 per cent increase was their final offer. That was far below what the NUM had been pushing for, which was increases of up to 60 per cent for new underground entrants and 15 per cent for other categories of miners.

The strike began on Tuesday and affected about two-thirds of production in the sector, which is the world's sixth-largest producer of gold.

"Indications are the majority of mines will be back at work by this evening. The exception is Harmony's operations [with the exception of Kusasalethu mine] where certain matters remain under discussion," the gold producers said in a statement.

Elize Strydom, an executive at the Chamber of Mines, which has been negotiating on behalf of companies, said the offer was "a little more than employers would have preferred".

"However, we ultimately took the view that the agreement has helped us prevent a longer period of damaging industrial action and remains a reasonably balanced outcome in terms of affordability and jobs preservation and, as such, is in the best interests of shareholders, management and employees," she said.

The NUM did not make an official comment.

A resolution to the wage dispute with the NUM - which represents more than 60 per cent of workers in the sector - would bring some relief to companies that complain about spiralling costs and have warned that a protracted strike would be disastrous for an already struggling sector.

However, producers still have to reach an agreement with the Association of Mineworkers and Construction Union, the NUM's bitter rival which has made inroads into the industry since a wave of violent wildcat strikes last year.

It did not take part in the current strike, but has been demanding increases of more than 100 per cent for some categories of worker as it pushes for entry level underground workers to receive a minimum of R12,500 ($1,250) a month and for all surface workers to earn R11,500 a month. A basic entry-level salary in the gold sector is on average about R5,000 a month, which can rise to about R10,000 with benefits.

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Amcu is estimated to have about a 19 per cent representation in the gold sector. Companies have insisted they will not do separate deals with different unions and blame the rivalry between the two unions for exacerbating tensions across the industry.

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