Zimbabwe mining firms might be asked to triple wages

via Zimbabwe mining firms might be asked to triple wages –  Mineweb 02 Dec 2013 by Godfrey Marawanyika (Bloomberg)

Mining firms and the main labour union have reached a deadlock in talks for 2014 after the workers group demanded that wages be more than doubled.

Mining companies operating in Zimbabwe and the main labor union in the industry have reached a deadlock in pay talks for 2014 after the workers group demanded that wages be more than doubled, two people familiar with the negotiations said.

The Chamber of Mines, which represents companies, and the Associated Mine Workers Union of Zimbabwe, which represents 34,000 workers, met on Nov. 26 and as a result of the deadlock, the dispute has now been referred to the government’s National Employment Council, the people said, asking not to be identified because the dispute hasn’t been made public. The council will meet on Jan. 15 and will probably refer the matter to an arbitrator, the people said.

The Harare-based union wants employers to boost pay to a minimum of $800 a month for diamond-mine workers, $700 for platinum mines and $573 for gold and other mineworkers, while the Chamber is demanding an inflation-linked adjustment, according to position papers presented at the Nov. 26 meeting and obtained by Bloomberg. The current minimum wage for all mineworkers is $227 while annual inflation was 0.59 percent in October.

Zimbabwe has the world’s second-biggest platinum and chrome deposits after South Africa and has reserves of diamonds, gold, coal, nickel and iron ore. Companies that operate in the country include Anglo American Platinum Ltd.,Impala Platinum Holdings Ltd., Aquarius Platinum Ltd. and Rio Tinto Plc. Mining is the country’s biggest source of foreign exchange, with platinum group metals and gold leading tobacco as the nation’s biggest exports.

Risks Remain

In its position paper, the Chamber said that mining companies can’t afford to boost wages by more than inflation because of excessive taxes and falling commodity prices.

“Fueled by a decline in commodity prices, the overall income generated by the mining sector has declined across most minerals,” it said. “Risks remain tilted to the downside and emanating from easing international prices of minerals while long-term financing and energy constraints continue to bind.

The price of gold has fallen 25 percent this year, platinum has declined 12 percent and palladium, the biggest byproduct of platinum mining, has slipped 5 percent.

Growth in Zimbabwe’s mining industry slipped from 60 percent in 2010, the year after the country abandoned its currency in favor of currencies including the dollar to rein in record inflation, to an estimated 1.7 percent this year, according to the Chamber. Growth in the industry is forecast at 3.4 percent next year.

Plunging Production

The value of mineral production excluding diamonds fell to $1.402 billion in the first nine months of this year compared with $1.447 billion in the same period last year. Full-year production is forecast to fall 4 percent to $1.806 billion, the group said.

The value of chrome ore production is forecast to fall 45 percent this year to $26.9 million while high-carbon ferrochrome output will decline 31 percent to $96.1 million, the Chamber said. Gold revenue will decline 20 percent to $623 million while revenue from coal will slump 17 percent to $69.6 million.

Still, the value of nickel production is expected to jump 29 percent to $145 million, while platinum and palladium will post gains of 18 percent and 35 percent respectively to $548 million and $201 million.

‘‘The union believes that it’s fair and just for each sub- sector to remunerate its employees at rates that are proportional to its performance,” the union said in its submission.

Pay was raised by 15 percent for gold workers and 7 percent for other miners this year.

“Continued high wage demands made by the trade union threaten the survival of the industry,” the Chamber said.

Taxes amount to 17 percent of mine revenue and 60 percent of profit, the Chamber said.

“Of major concern are the indiscriminate or fragmented approaches by different government departments in levying charges to the mining companies, unjustified increases in the tax rates as well as the unpredictability of the mining tax regime,” it said.

–Editors: Antony Sguazzin, John Simpson

To contact the reporter on this story: Godfrey Marawanyika in Harare atgmarawanyika@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin atasguazzin@bloomberg.net

COMMENTS

WORDPRESS: 7
  • comment-avatar

    Even 100% will cripple the industry, let alone 300%!! In this time of depression in this country this is another recipe for disaster!

  • comment-avatar
    lawyer 8 years ago

    I thought the MDC originated from the Trade Union.
    So what we are saying is that MDC is promoting more pay for miners.
    Thought Biti was MDC.

  • comment-avatar
    Mr Mixed Race 8 years ago

    Sorry Lawyer-What has Biti done in the above article? This has to do with the mines unions which are negotiating with misguided agendas.

  • comment-avatar
    Charlie Cochrane 8 years ago

    It’s high time mining companies paid their employees more.What argument is it about crippling the industry yet mineworkers in South Africa are paid at least 3 times more than Zimbabwean miners.
    These large multinationals and highly profitable entities worldwide should open their books and pay a decent living wage to people………. $227 gor a man’s sweat and blood for a month’s work is disgraceful and before anyone mentions that coterie of buffoons called zanupf, this is not about those b*stards it is about common decency and about big corporates doing the right thing without being forced to by governments!! (I do, of course, exclude zanu from description ‘government’ as they would be better described by the words ‘organised crime or mafia’)

  • comment-avatar
    Kakara Kununa 8 years ago

    Viva Mushandi. Mine workers have been treated unfairly for too long.
    Most if not all of the mining companies have been making super profits. Year in and year out these companies have been misinforming
    employees/workers about the mineral prices on the market.Each year the executives buy themselves posh/luxury cars and yet they do not care on the basic necessities of their poorly paid employees.The government should seriously look into it.

  • comment-avatar

    Saying it is one thing, implementing is another. we are tired we know zvichangonyura zvakadaro.

  • comment-avatar

    if platinum is sold on international market at same price as that mined in south africa, then there is reasonable grounds to advocate for almost similar wages. Multinational corps may subsidise wages in south africa using zimbabwe mined minerals, just my opinion