JOHANNESBURG (miningweekly.com) – The Association of Mineworkers and Construction Union (AMCU) on Tuesday demanded 150% increase in minimum pay for all entry-level underground gold-sector mineworkers, and an even bigger 159% increase for newcomers performing surface functions – significantly outdoing the National Union of Mineworkers’ (NUM’s) 60% demand.

AMCU general-secretary Jeffrey Mphahlele said in a document released to Mining Weekly Online that the union had set the entry-level minimum for all underground workers at R12 500 a month across all gold companies and at R11 500 a month for surface workers.

The current agreed entry-level wage for underground gold-mine workers is R5 000 a month, with from R4 350 to R4 439 a month paid to surface workers.

Eighty-five per cent of gold employees are underground employees and 15% are surface employees.

Even before any new increases, the mining industry is already the payer of the highest wages in South Africa's labour-intensive sector.

This is indicated by entry-level workers in manufacturing earning R4 534 a month and civil engineering workers starting at R3 994 a month.

Insiders point out that the difference with NUM's 60% demand is that it is for rockdrill operators (RDOs), who perform a key mining function, whereas AMCU's 150% demand is for entrants.

The R12 500-a-month minimum pay also resonates with the level demanded at Lonmin last year during the wave of unprotected strikes in the platinum belt, ahead of the tragic Marikana killings, which some see as potentially ominous.

In prior years, South Africa’s Chamber of Mines (CoM) gold-mining members granted miners, artisans and officials percentage increases in the 7.5%-to-10% range.

The latest towering demands represent the highest real and percentage increases ever requested and AMCU’s come a day before the deadline set by Deputy President Kgalema Motlanthe for acceptance of a sustainable mining accord and at a time when 40% of the gold mining sector is under water, after 12 t of gold worth R6.4-billion were lost in last year's illegal strikes and the collapse of the dollar price of gold.

The gold companies taking part in July’s crucial main collective bargaining negotiations are AngloGold Ashanti, Gold Fields, Harmony Gold, Sibanye Gold, Village Main Reef, Rand Uranium and Pan African Resources.

While AMCU is now the majority union across a large portion of the platinum belt – which engages in decentralised company-by-company wage talks – it is not the majority union in the gold sector, where centralised bargaining is the norm and where NUM is said to have a majority 64% representation.

AMCU is against decentralised bargaining for the platinum sector and, although NUM is an integral part of the centralised bargaining process in gold and coal, it has, ironically, struck a decentralised pay agreement with Aquarius Platinum at the Kroondal platinum operation, where NUM is the majority union for 8 120 personnel.

This represents the first agreement of the bargaining season and has drawn strong applause from analysts like Liberum Capital of London, which said in a note: "We view this as a great result and a surprise to the upside for Aquarius."

Far from the heady percentage demands being made in gold, the Kroondal pay increase is said to only "slightly exceed the increase in the cost of living, as measured by the inflation rate".

Because of NUM’s high demands - made a month ahead of AMCU's - CoM, in a departure from normal procedure, agreed to one-to-one discussions with NUM ahead of this year’s crucial main collective bargaining negotiations, in a bid to lower expectations.

CoM’s bilateral pre-engagement with NUM is due to be followed by a multiparty pre-collective-bargaining engagement with AMCU, Solidarity, Uasa and NUM.

AMCU’s 11-page wage submission calls for the collapsing and elevation of a long list of job categories, and demands that employees on so-called B-levels receive R7 500 a month salary increases in addition to current basic rates.

The union calls for housing allowances to rise to R6 500 a month, living-out allowances  to R4 000 a month and the introduction of transport allowances of R4 000 a month.

RDOs must receive drilling allowances of R2 000 a month and other operators allowances of R1 500 a month.

It wants resident allowances to increase to R2 000 a month and up to 15% of individual basic salary to be paid for extra shifts.

The first 90 days of sick leave must be on full pay, the second 90 days on half pay and women miners must receive nine months of paid maternity leave.

It wants each mine to pay a R30 000 funeral benefit to each employee.

AMCU is also demanding that current provident fund providers be replaced by new provident fund providers chosen by AMCU members and that 70% of medical aid contributions be paid by employers and only 30% by employees.

Severance pay must be set at a minimum of R50 000 as a lump sum and a further R20 000 for life skills training.

AMCU wants an independent audit of microlending and garnishee orders and a refund of 15% interest to all employees who have been wrongly affected by illegal deductions.

It rejects the employee share ownership scheme (Esop) concept as a farce and demands a review of Esops.

It wants labour broking abolished and the salaries of contract workers paid into employee-selected bank accounts and not to employment agencies.

A service increase of 2.5% at the anniversary of employment each year must be paid as service recognition and the creation of mine villages with schools, churches, sports fields, and shopping complexes being built in partnership with local authorities.

"Through the percentile demand increment, the gap between low wage earners and high wage earners has widenened significantly and added to this has been the Paterson job-grading system and the appointment of job categories on racial lines.

"Our negotiating agenda for 2013 therefore seeks to address the socio-economic challenges by demanding a living wage and improved conditions of employment," Mphahlele said in his submission to CoM senior executive employment relations Dr Elize Strydom.

AMCU, headed by president Joseph Mathunjwa, sets the implementation date as July 1, with back payment irrespective of when the agreement is reached.