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South Africa mine unions divided on wage offers in troubled gold sector

A mine shaft is seen near Carletonville, west of Johannesburg, July 20, 2015. REUTERS/Siphiwe Sibeko

By Ed Stoddard JOHANNESBURG (Reuters) - South Africa's National Union of Mineworkers (NUM) said on Friday its members had accepted the latest pay offer from gold producers covering the next three years. "Our members have accepted the offer," David Sipunzi, NUM's general secretary, told Reuters. NUM is the biggest union in the sector, representing over 50 percent of the industry's workers. Two smaller unions which represent mostly skilled workers have also accepted the offer. But the Association of Mineworkers and Construction Union (AMCU), which represents close to 30 percent of workers in the sector, has not and an industry source said the union had received a certificate from the government mediator allowing it to call a strike. "AMCU has indicated it will go to its members on the issue of a strike to get their mandate," the source said. AMCU could not be immediately reached for comment. AMCU's decision not to accept the offer will complicate matters as Sibanye Gold, one of the four companies involved in the talks, has said it will only sign the deal if all the unions agree to it. Such a scenario could also stoke tensions in a sector that has seen waves of labour unrest and dozens of deaths in the past three years in violence rooted in a vicious turf war between AMCU and NUM. The offers vary from company to company but will see pay hikes on the basic wage for the lowest-paid, entry-level members of up to around 14 percent in the first year. Including allowances, the deal ensures that entry-level, underground employees will receive guaranteed pay of between 13,728 rand and 14,611 rand per month in the third year. This would equate to increases for the entire package by the third year of between 26.5 percent and 32 percent. The other companies involved are AngloGold Ashanti, Harmony Gold, and Evander Gold, a unit of Pan African Resources. They made it clear that they could not afford big hikes as they grapple with depressed prices and soaring costs in the world's deepest mines. South Africa has produced a third of the gold ever mined but the industry is in a state of accelerating decline. According to the Chamber of Mines, costs between 2008 and 2014 rose on average by over 20 percent per year. Production over the past decade has declined by almost 8 percent annually.