JOHANNESBURG (miningweekly.com) – The wage issues of the South African mining industry will be resolved and the industry will move forward, says Chamber of Mines CEO Bheki Sibiya.

“Yes, there are challenges around wage negotiations," says Sibiya, who addressed a mining student conference at Wits University’s School of Mining Engineering at the weekend (also watch attached video).

While the gap between the 5% offer of the gold producers and the 100% demand of the unions raises doubts about a settlement being reached, South Africans invariably apply themselves successfully to their challenges, regardles of how difficult.

He could not say whether the wage disputes would be resolved with or without industrial action.

“But as sure as the sun rises in the east and sets in the west, they will be resolved, and the mining industry will move forward,” Sibiya assures.

He also has extreme confidence in the mining industry’s partnership with government, which he describes as “rock solid”.

Mineral Resources Minister Susan Shabangu says there is no place in the world where government, business and labour collaborate as closely as they do in South Africa.

"The current challenges facing the industry are not, and cannot be, permanent. They are cyclical," Shabangu says.

South Africa, she adds, still has more than 100 years of mining ahead of it.

Meanwhile, the chamber on Monday declared a dispute with the Association of Mineworkers and Construction Workers Union (AMCU), a mirror image of what the National Union of Mineworkers, Uasa and Solidarity did last week when they declared a dispute with the chamber.

Both disputes have been referred to the Commission for Conciliation, Mediation and Arbitration for mediation.

The gold producers acted following AMCU's inaction in negotiating its demands, bringing AMCU deeper into the formal process.

In the interim, the mining industry is characterised by widespread financial insecurity that has spread to mining's forward, side and backward linkages that rely on the industry for their own wellbeing.

Chamber executive director Roger Baxter points out that 61% of South Africa’s gold mines and 59% of its platinum mines are currently loss-making.

Far more than the industry itself is hit by strike action and many of mining’s sidestream industries, which provide a wide range of goods and services to the sector, came to standstill during last year’s uprotected mining strikes, Baxter adds.

While mining’s direct contribution to the gross domestic product (GDP) is 19%, its multiplier effect is double that and mining activity creates an estimated 1.35-million non-mining jobs in the South African economy.

The value and extent of existing local mineral beneficiation is also often underestimated.

For example, JSE-listed Sasol creates R165-billion worth of value in the South African economy, including R20-billion in taxes, as a result of mining R11-billion worth of coal.

Half of mining’s dividends go into the pension funds of millions of South Africans, because the bulk of the assets of mining companies are owned by either the State-owned Industrial Development Corporation or locally domicled pension and provident funds.

Generally, many people do not give mining credit for having played a key role in helping the South African economy become Africa’s most industrialised economy by far, accounting for 28% of Africa’s GDP and half of Africa’s electricity generation.