South Africa Gold Miners Unable to Afford Wage Increase

africa_gold_mine

A two digit wage boost at gold mines in South Africa would force the closure of some mines in the commerce, Harmony Gold excavation Co. (HAR.JO) said Wednesday.

Harmony Chief Executive Graham Briggs said “A gigantic double digit boost will impairment some companies…some operations won’t survive that,”

Gold mining businesses in South Africa are in the middle of negotiating a new wage affirmation with unions. Late Tuesday, the industry bodies sleeping room of Mines said gold companies have increased their offer to an increase of 5.5%. Unions are still impelling for a double digit increase.

Companies and unions have until August 24 to reach agreement or unions could be adept to proceed on hit.

Gold mining companies founded in South Africa have been describing drops in earnings in latest weeks due to smaller global gold charges and they alert occupations at mines are at risk as an outcome.

Harmony Gold said it is already cutting capital expenditure designs and investigation allowances due to the prized metal’s smaller cost. In the past year, the company has also decreased about 1,200 business level occupations over its procedures.

In 2014 Harmony Gold plans to spend $313 million on capital expenditure, down from a preceding design to invest $540 million. The business is furthermore looking at distinct ways to evolve its Papua New Guinea gold mine in light of the tough functioning environment.