South African gold mining industry ahead of difficult pay negotiations

The gold price failed to profit from the weak US dollar yesterday and is continuing to trade below $1,180 per troy ounce. The fact that the US currency depreciated against the euro put significant pressure on gold in euro terms, driving it below €1,040 per troy ounce to a five-month low. 

Today will see the start in South Africa of what no doubt will be difficult pay negotiations between gold mining producers and the gold's sector's largest union, the National Union of Mineworkers (NUM). Representing 57% of the country's gold mine workers, the NUM is calling for wages to be increased by 84%, notes Commerzbank. 

The smaller and more radical Association of Mineworkers and Construction Union (AMCU), which represents 29% of the workers, is even demanding that wages be more than doubled. The current collective agreement expires at the end of this month. In April, the NUM had reached a separate agreement with the producer Gold Fields that wages would be raised by 21% over a period of three years, according to Commerzbank.