Five-year wage agreements in the mining sector have found favour with trade unions and mining houses, bringing about stability in the sector with a history of hostile industrial relations.
Petra Diamonds and the National Union of Mineworkers (NUM) this week became the latest entities to sign a five-year wage agreement at the union’s head office in Johannesburg.
Richard Duffy, CEO of Petra, said the agreement allowed for “continued certainty on fixed labour costs at our SA operations and enables us to renew our focus on operational delivery”.
Despite NUM chief negotiator Masibulele Naki describing the negotiations as robust and difficult, he emphasised its importance in sustaining jobs and keeping workers happy.
Sibanye-Stillwater in November concluded a five-year wage agreement with all representative unions, comprising the Association of Mineworkers and Construction Union (Amcu) and NUM at its Kroondal platinum group metals (PGM) operations.
Sibanye spokesperson James Wellsted said the trend towards five-year agreements showed that engagements between the unions and companies had matured and there seemed to be a better appreciation of the mutual requirements from the parties.
“The five-year agreements mean that these negotiations only take place every five years, so it reduces the time commitment to this from leadership of the companies and the unions and gives greater certainty to employees about future wages and for the companies about wage-related costs and reduces the risk of wage related strikes and other disruptions over a more extended period. This allows for more stable operations, which should benefit all stakeholders,” Wellsted said.
Sibanye in 2019 lost more than R1.5bn in lost production after a five-month strike at its SA gold mines.
JSE-listed mid-tier Pan African Resources last week struck a five-year wage deal with NUM for its Barberton mines operation, covering the period June 2024 to June 2029.
SA’s biggest gold producer by volume, Harmony, earlier this year signed a five-year agreement with all labour unions operating at its mines, the first time the company has done so in its 73-year history.
NUM spokesperson Luphert Chilwane said the unions were seeking five-year wage agreements to protect workers against an increase in the cost of living.
“It is also important to look at the issue of job security. There are very serious issues that are faced by the industry at this stage and job stability and sustainability is one of our approaches in terms of our wage negotiations,” Chilwane said.
Amcu general secretary Jeffrey Mphahlele said long-term wage deals brought greater stability. However, he said long-term deals also carried risks for workers as they might not benefit from high commodity prices.
“A three-year wage deal was better because it brought peace in the industry and stability, but the problem with these three- to five-year deals is that the companies do not review the deals with the unions when gold is booming, and add a [small] increment to the salaries. They argue that whatever percentage we have agreed upon will not change for the duration of the deal,” Mphahlele said.
Though the Russia-Ukraine war had caused metal prices to rise, when unions approached the companies to share the proceeds of profit they refused, he said.
Bench Marks Foundation chief researcher David van Wyk echoed Mphahlele’s views, saying five-year wage agreements in mining were impractical because mineral commodity prices fluctuated wildly.
“Many mines are simply no longer viable, platinum demand is weak due to the end of combustion engines and the demand for catalysts is collapsing,” Van Wyk said.
What remained viable was gold, which was deep and expensive to mine, even though the gold price was high, he said
“The frequent changes in mine ownership such as in the case of the Sibanye/Anglo Kroondal mine caused labour disruption because of change of ownership issues. Large-scale industrial mining is in steep decline globally and with it large-scale industrial trade unionism,” Van Wyk said.
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