[miningmx] - DRDGOLD brought a two-day strike at its Ergo plant to a rapid close agreeing an aggregate 8.84% increase in annual wages, equal to extra costs per year of about R21m. A previous draft wage agreement was for a total cost increase in wages of R19m.
DRDGOLD brought a two-day strike at its Ergo plant to a rapid close agreeing an aggregate 8.84% increase in annual wages, equal to extra costs per year of about R21m. A previous draft wage agreement was for a total cost increase in wages of R19m.
"Employees who have been on strike have started to return to work at the start of the night shift on 9 October," the company said in an announcement. "It is not anticipated that the strike will have had any material effect on production," it said. About 600 employees at Ergo had downed tools. DRDGOLD said it would have been possible to continue operating for a while before losing production.
In terms of the agreement with the National Union of Mineworkers (NUM), entry-level employees in job categories 4 and 5 will receive a 10% basic wage increase in year one and 8% in the following year.
NUM had earlier requested that entry level categories be rolled up with higher categories, a demand that DRDGOLD CEO, Niél Pretorius said the company could not countenance. "There's absolutely no way we can agree to this," he said.
Employees in job categories 6 and 7 will receive 9% in the first year, and 7.5% in year two while employees in job categories 8 to 15 will receive 8% in year one and 7.5% in the second year, the company said.
"The higher increases at the lower end could be accommodated within budget parameters by tapering increases for middle and senior management for the 2014 calendar year," 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.
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.