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Good raises end South African gold miners' strike

Section: Daily Dispatches

By Devon Maylie
MarketWatch.com
Tuesday, August 2, 2011

http://www.marketwatch.com/story/miners-end-south-africa-gold-strike-wit...

JOHANNESBURG -- Striking miners at South African gold mines should return to work by the end of the week after signing Tuesday a wage agreement that will see pay raises almost double the rate of inflation.

The miners' action is part of a series of strikes in South Africa over the past month that has led to a drop manufacturing, which banks said could lead to a lowering of the country's gross domestic product growth for the year.

July and August are traditionally periods of high worker stoppages as employees strike to back the unions negotiating with companies over the next year's wage increases.

Johannesburg-based Absa Group Ltd. on Tuesday forecast the South African economy to grow 3.5 to 4% this year, but the high number of strikes occurring right now could cause that figure to be lowered.

... Dispatch continues below ...



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Already economic data are showing a drop in productivity. July's factory activity fell to a two-year low, according to a poll released Monday by the Bureau of Economic Research and sponsored by the Kagiso Group. Workers in the metals and engineering sector were on strike from July 4-18.

The mining unions and gold mining companies signed a two-year agreement for a rise of between 8 and 10%, depending on the level of worker experience, the union Solidarity said.

Since Thursday, around 200,000 miners from both Solidarity and the National Union of Mineworkers have been on strike at gold mines across the country over a problem with the annual pay increase.

This latest deal follows the conclusion of a coal strike Monday and the resolution of an almost three-week long strike in the petroleum and refinery sector that ended last week.

However, unions are still negotiating with platinum miners and the utility Eskom Holdings Ltd.

The companies affected by the coal and gold strike include Anglo American PLC, AngloGold Ashanti Ltd., Gold Fields Ltd., and Harmony Gold Mining Co. South Africa is the world's fifth largest gold producer.

Harmony estimates it lost 500 kilograms of gold output on account of the strike.

"The unions have indicated that the striking employees will start returning to work later today," the Chamber of Mines said.

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