HomeBusiness DigestGalloping inflation: Miners meet again for wage talks

Galloping inflation: Miners meet again for wage talks

THE Associated Mine Workers’ Union of Zimbabwe and the employers’ body, the Chamber of Mines, will negotiate an increase in the minimum wage for a third time this year as a result of the continuous erosion of earnings by runaway inflation, businessdigest has learnt.

Kudzai Kuwaza

This comes as the economic crisis is deepening characterised by a debilitating liquidity crunch, foreign currency shortages, escalating prices of basic commodities, prolonged power outages, low productivity and runaway inflation (year-on-year) now estimated at more than 200%.

Amwuz president Tinago Ruzive told businessdigest that they will meet the Chamber of Mines next month to discuss the minimum wage for a third time this year.

“We will definitely meet the chamber next month to discuss an increase in the wages of workers which have been eroded by inflation,” Ruzive said.

Although he would not disclose the wage figure they will be demanding during negotiations, Ruzive said the ideal increment will be that which is in tandem with the current inflation figure.

One of the negotiators from the Chamber of Mines confirmed to businessdigest that they will meet mine workers to discuss the issue of the minimum wage.

“We will meet with mine workers next month. We will soon exchange papers on wages. This will be the third time we will be adjusting wages this year,” he said.

The two parties agreed a 35% cost of living adjustment to cushion workers from the current inflationary environment last month. Mine workers had demanded a 50% increment with the employers’ body initially offering a 26% raise before settling for a cost of living adjustment of 35%. This is on top of the 80% increment they had agreed upon in March as the minimum wage for 2019.

Mine workers had demanded to be paid in foreign currency, arguing that this is the only way that they could preserve the value of their salaries. The chamber pointed out that it was not possible unless mining companies are allowed to retain at least 80% of their foreign currency receipts by the Reserve Bank of Zimbabwe.

In an interview earlier this year, 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 in 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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