[miningmx.com] – About 600 workers at DRDGOLD's Ergo plant stopped work this morning after the gold dumps retreatment company declined to accept 'eleventh hour' wage demands that would have increased its wage bill by R43m a year.
About 600 workers at DRDGOLD's Ergo plant stopped work this morning after the gold dumps retreatment company declined to accept 'eleventh hour' wage demands that would have increased its wage bill by R43m a year.
DRDGOLD CEO, Niël Pretorius, said he was non-plussed by the developments as the company had a draft agreement in which average wages would have increased 8.1%, equal to R19m a year higher wage bill.
"There's absolutely no way we can agree to this. I think the problem has arisen at the NUM regional office because I thought we had an agreement," said Pretorius. DRDGOLD would continue to operate Ergo with no immediate interruption to revenue.
"The last time we had strike action we were able to operate for a month. I'm not sure how much flexibility we have this time, but we can continue to operate for a while. The material is still coming into the plant," he said.
In terms of the contingency plan, the normal three, eight-hour shifts would be moved to two, 12 hour shifts, said Pretorius.
DRDGOLD produced 146,381 ounces of gold in its last financial year, 8% higher than in the previous 12 months and revenue grew 18% to R2,076.5m. Its operating profit was R679.3m, a 9% increase year-on-year. Headline earnings rose 11% to 68 South African cents a share.
NUM demands included rolling up job category 4 to job category 6, and that a skills retention increase be accepted for engineering foremen be extended to all foremen.
In contrast, the company offered a two-year agreement with basic wages for category 4 and 5 increasing 8%, and 7.5% for categories 6 to 15. A 10% increase in the living out allowance was provided for 2013 and 2014, the company said.
"At present, DRDGOLD’s Ergo operations are not affected by the industrial action. The industrial action is protected as the union was granted a strike certificate of non-resolution of dispute by the CCMA," the company said in a statement.
DRDGOLD negotiates its wages outside of the Chamber of Mines of South Africa which last month concluded wage settlements for its members of up to 8%, equal to a wage bill of an additional R1.5bn in costs, Reuters reported.