Sibanye-Stillwater offers profit sharing for strikers, but unions are skeptical

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Jeff Mphahlele, AMCU General Secretary.

  • The Sibanye-Stillwater strike has entered its 12th week.
  • The company offered 5% profit sharing to the workers.
  • Union negotiators are skeptical, but will take the offer to the members.

Sibanye-Stillwater has offered strikers a 5% profit share in perpetuity in a bid to settle the wage strike at its gold mining operation, now in its 12th week.

Union negotiators, who themselves are not in favor of the offer, are due to report to workers at a mass meeting at the Driefontein mine on Friday. The offer was made at a meeting between management and unions on Tuesday.

The sides are only R200 apart, with Sibanye-Stillwater offering a R800 raise on the base salary of R10,237 with the Association of Miners and Construction Union (AMCU) and National Miners’ Union ( NUM) requiring R1,000. With the price of gold at current levels, the 5% profit sharing would effectively close the gap between the parties. However, if the price of gold goes down, the share of profits due to workers will also go down.

Introducing profit sharing would be a rational change in the way wages in the mining sector are negotiated given its cyclical nature and reliance on metal prices for profitability. But the unions, whose objective is to sustainably raise the level of base salaries in the gold sector, are not in favor of variable pay.

AMCU General Secretary Jeff Mphahlele said Friday:

“We have rejected this on the side of the negotiators because it is not guaranteed. This month it could be 230 rand and next month you will get nothing. We want something constant. Although we are not no deal as negotiators, we will still take the offer to the masses for discussion.”

NUM General Secretary William Mabapa could not be reached for comment.

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Sibanye-Stillwater spokesman James Wellstead said Thursday the company was disappointed.

“We presented a few options, including a five-year deal with 5% profit sharing. But union negotiators are determined to achieve the R1,000 per year increase. What we put on the table is what we can afford,” Wellstead said.

Sibanye-Stillwater is keen to avoid a permanent increase in fixed costs, which would shorten the period during which its mines will remain profitable. But workers, spurred on by the growing disparity in starting wages between gold and the more lucrative platinum, are determined to raise base pay. Basic salaries at the entry level in the platinum business are around R15,000 per month.

With nearly months of wages already lost, it will take at least three years before workers in the Sibanye-Stillwater gold sector can recoup their financial losses from the strike.

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