JOHANNESBURG (miningweekly.com) – Gold producers were bracing for strike action, as the Chamber of Mines (CoM) on Friday confirmed the gold mining companies had received a 48-hour strike notice.

AngloGold Ashanti, Gold Fields, Harmony Gold, Evander Gold Mine, Sibanye Gold and Village Main Reef would prepare for the strike, which was expected to start on Tuesday.

ASX- and JSE-listed Gold One said it had recieved notice from the National Union of Mineworkers (NUM) of the coming strike at its subsidiary Rand Uranium's Cooke 1, 2 and 3 shafts, as well as the Randfontein surface operations.

NUM national spokesperson Lesiba Seshoka confirmed that an estimated 70% of gold-sector workers were set to down tools after unions and gold producers reached a deadlock on wage talks this week.

NUM last week issued a seven-day ultimatum for companies to meet their demands of up to 60% in wage increases, but, by Thursday, the gold producers had drawn a line on its final offer of up to 6.5% plus 1% profit or gain share, refusing to entertain higher-than-inflation demands and standing firm on its decision not to negotiate with individual unions separately.

Solidarity spokesperson Gideon de Plessis on Friday slammed the gold producers approach, saying that the industry had bowed out of the negotiations in bad faith after it declared a deadlock on Thursday on the basis that no union had accepted the CoM’s collective final offer.

Contrary to the gold producers noting that none of the unions had accepted their offer, Solidarity said it had, in principle, accepted the offer on Tuesday, but had required clarification on the profit and gain shares tabled, which the union claimed was never presented.

“The chamber gave collective bargaining a deathblow by prematurely ending negotiations with Solidarity, which was [and is] still committed to a negotiated settlement,” he said.

The group had continued its wage negotiations with Village Main Reef and Gold Fields.

Uasa spokesperson Franz Stehring told Mining Weekly Online that, while it was still undertaking a ballot from members, it was clear that most of the union’s members wanted to accept the final offer tabled by the gold producers for the first year, but demanded the employers revise the second year of the agreement to increases in line with consumer price inflation plus 1%.

The ballots would be collated by 16:00 on Friday, he said.

Harmony Gold CEO Graham Briggs said that the strike would result in a loss of R100-million in wages a day, further hurting workers already strained by debts and surrounded by unsecured lending syndicates.

In the end, about 1.4-million people would be impacted as almost every person working at the mine had an average of ten dependants relying on their salary each month.

The impending strike would also cost South Africa’s economy about R549-million a day. Industry would lose about R349-million in lost revenue, R43-million in stores and materials not being bought and R29-million in electricity paid for but not used, besides others, each day. The State would lose out on R9-million a day in taxes.

“We want to avert a strike, which comes at a huge cost, [weighing on] production, revenue and confidence in the market. We may even have to shut down shafts – some permanently,” Briggs said at a Chamber of Mines media briefing.

Sibanye Gold CEO Neal Froneman commented that the NUM’s and the Association of Mineworkers and Construction Union’s (AMCU’s) demands for wage hikes between 60% and 120% bore strong indications of union rivalry, with chief negotiator Dr Elize Strydom adding that these unions had not budged “at all” within the past two months and were not negotiating.

Uasa raised concerns that the rivalry between AMCU and NUM, and the imminent strike, could result in the company reacting with a lock-out encompassing all the unions.

But Briggs indicated that a lock-out, or strike action, would not resolve the current stand-off, and that the industry could not afford to lose a day of production.

The companies would individually decide on a lock-out, but none had directly stated its intention to institute one.

Stehring said Uasa members found this unfair as the group had not initiated strike action and had assisted companies in maintaining operations when the other unions downed tools.

Gold One said that essential services workers were not permitted to strike and neither were employees in the Paterson D and E levels categories, as they fell outside of the recognised bargaining unit.

Workers at the Cooke 4 operations, operated by Ezulwini Mining, could not embark on industrial action, as they already had a two-year wage agreement expiring only in March 2014.

"Management has contingency plans in place to mitigate the impact of the industrial action and will continue to keep the market informed of further developments," Gold One said in a statement.