HomeBusiness DigestMining companies balk at 1,5% wage hike

Mining companies balk at 1,5% wage hike

SEVERAL mining companies have applied to be exempted from effecting a 1,5 % wage increment the Chamber of Mines and the Associated Mineworkers Union of Zimbabwe (AMWUZ) agreed on for 2016 owing to acute viability challenges, businessdigest has learnt.

By Kudzai Kuwaza

The two parties reached a settlement in their fourth wage negotiation meeting held on February 18 this year after protracted debate.

“There are indeed a number of mining companies that have approached the Chamber of Mines (of Zimbabwe) to be exempted from paying the increment,” an informed source said.

“Most mining companies actually wanted a reduction. Most mining companies are making losses and to affect that increase makes it even worse.”

The decision by government to close foreign companies that do not comply with indigenisation requirements by today will only worsen the mining companies’ predicament, the insider said.

AMWUZ president Tinago Ruzive said the union was concerned by the applications by mining companies not to pay the agreed increase.

“We are very concerned about the applications being made by mining companies,” Ruzive told businessdigest this week. “Mining companies save for platinum mines should be able to pay the increased wage. The mining companies are acting in bad faith,”

The development comes at a time the sector is facing numerous bottlenecks which include low mineral prices for most metals on the international market and power shortages.

The chamber had initially proposed a reduction in the minimum wage, with the union demanding the minimum wage be pegged at the poverty datum line (PDL) which would have represented a 95% increase in the minimum wage for the sector.

After further meetings, the chamber said it would not increase the minimum wage while the mine workers had reduced its demands to a 6% increment in wages before finally settling for the 1,5% increase in wages.

Mining sector output recorded a negative growth of around -3,4% and -2,5% in 2014 and 2015 respectively as most minerals recorded declines in output, led by chrome which reported the largest decline of 48% in output followed by coal and diamonds at -31% and -30% respectively.

A 30% increase in production was only recorded on gold followed by a modest 1% growth in platinum while copper production remained flat in the period under review.

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