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.
Sibanye-Stillwater is a multinational precious metals mining company, revealing a diverse portfolio of platinum group metals in South Africa and the United States, gold and base metals operations and various mining projects in South Africa and the Americas.
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.
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.
“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.
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.
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.