South Africa's gold mining industry is in a perilous condition. In the second quarter of this year alone, the gold price plummeted $220 (R2 153) an ounce, partly in the wake of US economic recovery, which has reduced the demand for gold as a secure store of value.
Add to this soaring infrastructure costs and declining labour productivity, not to mention decreasing ore quality that is increasingly difficult to access, and it is no surprise that the Chamber of Mines opened wage negotiations with an offer of a 4 percent increase to the National Union of Mineworkers (NUM). The NUM responded by rejecting the offer as "insulting". But unionists must surely also understand that their double-digit demands (in the region of 60 percent for entry-level workers) are untenable.
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