SEVERAL mining companies have applied to be exempted from paying the 2018 minimum wage increment for the sector agreed by the Chamber of Mines and the Associated Mineworkers’ Union of Zimbabwe(Amwuz), businessdigest has learnt.
By Kudzai Kuwaza
In January this year, the two parties agreed on a 2,9% increment for the minimum wage for 2018. The latest increment brings the minimum wage in the mining sector to more than US$250.
Amwuz president Tinago Ruzive told businessdigest last week that several mining companies have applied to be exempted from paying the minimum wage, citing viability challenges.
“Some mining companies have applied to be exempted from paying the minimum wage we agreed with the Chamber of Mines,” Ruzive said.
“Most of those which have applied are small-scale miners and we shall meet soon to discuss the merits and demerits of each application.”
He said it was imperative to review the applications as some mining companies can afford to pay the minimum wage but are unwilling to do so to maximise on profits.
Despite the increment, the 2017 State of the Mining Industry Survey revealed that all respondents of the survey were of the view they cannot afford wage increments for 2018 due to viability challenges.
The report also revealed that the major challenges bedeviling the mining sector include foreign currency shortages, liquidity crunch, high cost of capital, steep procurement costs as well as the erratic supply, shortage and high cost of power and low commodity prices.
The survey revealed that labour (31%), supplies (39%), power (13%) and statutory payments (14%) accounted for an average 97% of total costs last year.
The survey established that capacity utilisation of the mining sector has this year increased to 71%, up from 64% last year. The sector’s capacity utilisation is expected to increase to 79% this year.