Precious Metals

Mining Weekly reported that Srinivasan Venkatakrishnan, CEO of AngloGold Ashanti Ltd. (NYSE:AU), believes that yearly wage negotiations in South Africa between gold companies and their employees could bring “dire economic consequences for the local gold sector.”

Mining Weekly reported that Srinivasan Venkatakrishnan, CEO of AngloGold Ashanti Ltd. (NYSE:AU), believes that yearly wage negotiations in South Africa between gold companies and their employees could bring “dire economic consequences for the local gold sector.”

As quoted in the market news:

Gold companies’ management were now looking to reach a new accord with employees and their labour unions to arrest this downward spiral and restore the industry to a more sustainable long-term footing.

‘It is crucial for the future of one of South Africa’s key economic contributors, and indeed for individual mines and their employees, given that companies cannot be expected to persist with unprofitable operations,’ AngloGold said in statement.

The companies would, this year, propose an ‘Economic and Social Sustainability Compact’, which would comprise a mutually agreed set of binding principles that would determine the rights and responsibilities of companies and organised labour in respect of workplace activities and consequences, including wages and conditions of service.

The fundamental principles of the proposed compact would be sustainability through a partnership approach by the companies, the unions and employees.

Proposed wage increases and other terms and conditions of employment would be considered with due regard to their impact on the sustainability of the industry and on employment security.

Venkatakrishnan commented:

When you look at the wage negotiations this year and you look at the backdrop of what has happened [in the] platinum [industry], for example, [we saw] really unsustainable wage increases that [were] followed by job losses.

As a gold industry – excluding Gold Fields, as it has mechanised operations and is different to the other gold companies – our approach here is to say: Look at the totality taken into question here, and the compact, not just talks about the wage increase on one side, but … all the variables that we need to discuss … in terms of wage increases, in terms of what we provide to employees, in terms of productivity [and], importantly, job security, and the impact it has on jobs.

I am quite optimistic that sanity will prevail. Is it going to be an easy process? I don’t think so, but certainly, the dialogue has to start changing.

Click here to read the full Mining Weekly report.

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