South African Gold Fell Due To Inflation Pay Demands

The weakens of Gold price in COMEX

Unions have requested the South Africa’s biggest gold and coal producers to increase wages by 61%, 10 times the inflation rate. The country’s gold-stocks index declined to an almost 12-year low.

The National Union of Mineworkers (NUM), stated in e-mailed statement, it wants surface-level employees to be waged a minimum basic salary of 7,000 rand ($740) a month. Elize Strydom, the chief negotiator for the Chamber of Mines, the body through which wage talks take place, said today, that salary compares with 4,350 rand paid now. General Secretary Gideon du Plessis stated that solidarity wants an increase of 10% for all members,.

Strydom said by phone “The chamber has circulated these demands to all its members and the members will now meet,”

In South Africa mining companies are reining in expenses plans among increasing costs, decreasing metals prices and labor troubles that froze output last year. Gold producers in the country, the world’s fifth-biggest producer of the metal, last year increased wages by 7.5% to 10%. Yearly inflation averaged 5.3% from 2010 to 2012 and was 5.9% in March.

The FTSE/JSE Africa Gold Mining Index dropped 3.4% to reach 1,318.49. AngloGold Ashanti Ltd., the world’s third-largest producer, fell by 3.6% to reach 156.16 rand, whereas Gold Fields Ltd. (GFI) decreased 3.5% to reach 53.62 rand, in Johannesburg at 2:30 p.m.