Gold miner forks out R387-million on wages each year

26th August 2011 By: Jonathan Faurie

South African gold-mining major Harmony Gold says wages cost the company as much as R387-million a year.

This revelation comes days after a relatively short strike in the mining sector over wages that saw gold miners down tools for four days.

CEO Graham Briggs reports that, although this is high, the company can now look forward to two years of “relative peace”, where production will not be interrupted by strike action. Harmony Gold, along with other gold-mining companies, negotiated a two-year deal with labour unions that will see workers getting a 10% increase each year over the next two years. In exchange, during this time, no worker in the gold sector may go on strike.

In addition to the 10% increase, employees will be entitled to join a profit share scheme whereby employees may have access to about 1% of the company’s shareholding.

The company managed to decrease its quarter-on-quarter cash operating costs by 12% to R242 851/kg. Briggs points out this figure was largely the result of power utility Eskom implementing the second of its three electricity tariff increases as well as a nominal winter tariff that the company had to pay. He points out that electricity accounted for R155-million of cash operating costs.

Meanwhile, the company recorded 15 fatalities up to July 2011. This is down from the 21 fatalities recorded in the previous financial year.

Briggs adds that the company needs to make a quantum leap when it comes to safety. “To achieve this, the company has employed a dedicated health and safety executive to accelerate the execution of the company’s health and safety strategy. “The largest part of this is the implementation of behaviour-based safety campaigns and initiatives,” says Briggs.

Meanwhile, the company has reported it is progressing well on the delivery of corporate social investment programmes on which the company spent over R120-million in the past financial year to achieve its objectives.