Keep wage deals down, warns Trahar
John Fraser
--------------------------------------------------------------------------------
E-Mail article Print-Friendly
ANGLO American CE Tony Trahar has warned South African trade unions that there must not be a repeat of last year’s inflationary wage settlements at Anglo Platinum, where workers were awarded up to 9,5% after resorting to strike action.
He warned that the strong rand was forcing mining companies to control costs. Wages formed an important element of cost inflation, accounting for 50% of gold companies’ cash costs.
“We have seen a period of fairly high wage settlements in SA,” he said.
“We have seen the government call to get wage settlements down, in line with reducing inflation.”
Trahar said he hoped that Anglo and labour could narrow that gap. “It’s important to keep costs under control with the rand having strengthened,” he said.
It would be “a challenge” to secure near-inflation wage increases in the South African mining sector.
There would need to be “careful interaction between management and unions in the mines”, said Trahar. “It should be on everyone’s radar screen (to get) the factors responsible for inflation under control.”
He said he was “rather disappointed” by the wage settlements at AngloPlat, which had ranged from a 7,75% rise to a 9,5% rise.
However, the settlement had been made “in a strike situation” which had affected production. It would be “desirable” to avoid work stoppages, Trahar said.
A balance needed to be struck between the risk of labour unrest and the need to agree to “reasonable” wage increases, he said. Conflict with the workforce affected morale, he said.
“Revenues in AngloPlat’s businesses, with the strong rand, are not wildly exciting,” said Trahar.
He said he hoped the company would be able to improve returns and reduce costs.
There were other cost pressures affecting the Anglo group, including hikes in fuel prices, which were an important contributor to cost inflation, especially in open-cast mining.
Trahar’s view was echoed by Chamber of Mines chief economist Roger Baxter.
He said that in recent years there had been fierce cost pressures due to rail tariff hikes and increases in the costs of steel and of water. “Labour can account for a much as 50% of total costs at a deep-level mine.
“Given that labour costs are such a large component of total costs in the mining sector, moderation of labour costs is very important for the viability and future of the mining industry.”
National Union of Mineworkers spokesman Moferefere Lekorotsoana said it was easy for Trahar to talk about wage moderation when Anglo directors earned large salaries.
“How long should workers bear the burden of generating wealth without getting the benefits?” he said.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
