Gold News

Gold Buying may rise as South African mineworkers 'could down tools'

The South African gold industry could be plunged into crisis after mineworkers threatened to strike if their wage increase demands are not met.

Workers in the country, which is the world's third-largest gold producer, are determined to secure a 15 percent pay hike, almost double the 8.4 percent year-on-year inflation rate on April.

Negotiations have taken place with a mediator this week but Senzeni Zokwana, head of the National Union of Mineworkers, revealed yesterday (June 18th) that the miners could down tools.

He told Reuters: "So far what we have been offered by employers is below inflation, we are still engaging them, but a strike will come if we see employers are not being reasonable."

Independent intervention was called for after the workers rejected an increase of seven percent, a figure described as "too low, especially for low earners" by Mr. Zokwana.

The news will interest anyone with a Gold Investment, as strikes would undoubtedly result in production - and therefore supplies - being impacted, which could push Gold Prices higher.

Just last week, official figures from Statistics South Africa confirmed that gold output in the country declined by 13 percent on a year-on-year basis in April, compared to a seven percent drop in March.

With gold companies claiming that they cannot afford to meet workers' demands and analysts predicting 300,000 job losses in the industry as a result of the recession, the production picture appears to be growing increasingly bleak.

South Africa was once the world's largest gold producer but it has now been surpassed by China and the US.

Want to Buy Gold but unsure how to do it? For dealing spreads of $3 per ounce – plus secure, professional storage in Zurich, Switzerland for just 0.12% per year – click through to BullionVault now...


See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals