Gold Prices could rise as miner strike looms in South Africa
The prospect of a miners' strike in the South African gold sector moved a step closer today (July 14th) after workers rejected the latest wage increase offer.
Three major unions are currently conducting negotiations with the country's powerful gold companies through a mediator after the row escalated in recent weeks.
However, the National Union of Mineworkers (NUM) has revealed that the rejection of an eight to ten percent pay rise could now lead to the workers downing tools.
"NUM has this morning rejected the Chamber of Mines' offer of between eight percent and ten percent from gold employers and will escalate the dispute on July 21st," NUM spokesperson Lesiba Seshoka was quoted as saying by Reuters.
When pushed to elaborate on the move by the Wall Street Journal (WSJ), he added: "The offer is totally rejected. We see it as an insult."
On Friday, the unions will meet Harmony Gold Mining, the country's third-largest gold producer, which has been attempting to thrash out a deal directly with the workers.
However, Solidarity union spokesman Jaco Kleyhans explained that a double-digit increase is the target and told the WSJ: "If next week's talks [with the chamber] fail, the unions will ask for a certificate to strike."
Chamber of Mines negotiator Elize Strydom countered in an interview with the news provider that the latest offer - which includes incentives such as an increase in the minimum allowance for living in provided housing - is "the best we can do under the circumstances".
Pay disputes in South Africa are watched with interest by anyone with a Gold Investment as a strike would inevitably impact production, thus increasing the possibility of rising Gold Prices.
In 2005, approximately 100,000 gold miners went on strike in the country for several days, causing output to be badly compromised.
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