12 July 2019

Zimbabwe: Miners Haggle Over Wage Increment

The Associated Mine Workers Union of Zimbabwe (Amwuz) and the employer body, the Chamber of Mines, are at loggerheads over a wage increment meant to cushion employees in the sector from the current inflationary environment.

The negotiations come at a time when the economic crisis continues to deepen, characterised by a foreign currency shortage, a debilitating liquidity crunch, prolonged power cuts and low production.

Amwuz president Tinago Ruzive told businessdigest this week that they had met on Tuesday and although they had agreed on the need for an increment, they disagreed on the amount to be awarded.

"We met and I am glad to say we see eye to eye on the need of having an increment," Ruzive said. "We however do not agree on what percentage workers will be given. The Chamber of Mines have said that they cannot pay much because of the power outages which have reduced production and meant that the sector has an uncertain future. "

Ruzive said they had argued that they need a huge increment in view of the skyrocketing of prices of basic commodities.

He said the two parties will meet next week for further discussions on the issue.

Ruzive however refused to disclose the percentage they are demanding.

The mine workers' boss said they had met the Chamber of Mines yesterday over revising the minimum wage and agreed that the two parties will meet on Tuesday next week to discuss the issue.

Mine workers received an 80 % increase in the minimum wage earlier this year after protracted negotiations. However, this has been eroded by inflation which currently stands at 97,85%.

Ruzive said there could be an increase in wage negotiations should the value of the local unit continue to be eroded.

In a recent interview, immediate past Chamber of Mines president and Bindura Nickel Corporation managing director Batirai Manhando pointed out that labour is one of the major cost drivers for the sector.

"The mining industry has reviewed the minimum wage rate for its employees a record 14 times in 9 years since 2009, resulting in a cumulative wage increase of around 780% between 2009 and 2018," Manhando said. "Labour costs have remained a huge cost driver in the mining industry, constituting around 34% of total revenue in the sector. In this regard, any upward adjustment to the wage rate will have serious consequences on the cost, and hence viability of mining companies. With most companies making losses and some having already been placed under care and maintenance, there is growing concern that there will be some company closures if the cost structure remains unsustainably high."

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