S.African wage talks in mining sector

Fri Jul 29, 2011

July 29 (Reuters) - Some 100,000 South African gold mine workers downed tools on Thursday over wages at the country's top three gold producers and one junior miner at a time when the price of the precious metal is near record highs.

In another labour dispute, coal miners walked off the job late on Sunday.

Following a pattern of recent years, many of the union demands are far above the official inflation rate, which was 5.0 percent in June. Companies say they can't afford steep increases as they grapple with other rising costs.

Many miners are lower or mid-income workers who spend much of their take-home pay on food and fuel, costs of which are rapidly rising.

Following are some facts about the current state of wage talks in the mining industry in South Africa, the world number one platinum producer and a top gold and coal exporter.

GOLD

Around 90,000 to 100,000 gold miners, or close to a fifth of the country's mining labour force, are currently striking, according to Reuters calculations based on company figures.

AngloGold Ashanti , Gold Fields and Harmony are the world's third, fourth and fifth largest gold miners. Workers are also one strike at a junior miner.

The country's chamber of mines, which is negotiating on behalf of the companies, said the two sides have moved closer to each other in talks that resume on Monday, but did not give further details.

The National Union of Mineworkers, the largest of the three unions involved in the talks, had been seeking a 14 percent increase in wages while gold employers had offered between 7 and 9 percent.

COAL

Coal miners walked off the job late on Sunday and the coal companies are also being represented by the Chamber of Mines.

Unions said some progress was made in talks on Thursday but the chamber says its offer has remained the same. The two sides will meet again on Monday.

NUM has been seeking a 14 percent raise, while employers have been offering 6 to 8.5 percent.

Anglo Thermal Coal SA , unlisted Delmas Coal, Exxaro , Kangra Coal, Optimum Coal and Xstrata Coal are the main coal companies involved.

PLATINUM

NUM, which had been asking Anglo American Platinum for a 20 percent wage increase, is looking for 15 percent. It said the company is offering 6 to 7 percent. Anglo American, the world's top platinum producer, has not commented. The two sides are due to meet next on August 18-19.

(sourced Reuters)

The world's second-largest platinum producer, Impala Platinum , is due to meet with workers on Monday. The union wants a 14 percent hike for low-wage earners and 13.5 percent for higher paid miners. Impala's latest offer is for 6 and 6.5 percent.

Australian Coking Coal Drops a Second Week; European Prices Fall

By Nicholas Larkin - Feb 14, 2011
Australian coking coal fell for a second week. Benchmark European coal derivatives declined for the first time in three days.
Hard prime coking coal from Australia sold for $318.25 a metric ton on average in the week to Feb. 11, down 2.1 percent from $325 the week before, according to Petersfield, England- based researcher IHS McCloskey.

Thermal coal from South Africa’s Richards Bay, site of the continent’s biggest export facility for the fuel, declined 5 percent to an average $114.89 a ton for the week, McCloskey said. That’s the lowest price since the week ended Dec. 17.

Coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year fell 0.4 percent to $117 a ton at 11:20 a.m. in London. The data are drawn from information supplied by ICAP Plc, GFI Group Inc., Spectron Group Ltd., Tullett Prebon Plc, Credit Suisse Group AG, McCloskey, Bloomberg and Tradition Financial Services.
(By Nicholas Larkin,London sourced;bloomberg)
Tags:Australian coking coal prices, benchamark, European coal derivatives, declined, hard prime coking coal, IHS McCloskey, South African thermal coal prices, Richards Bay Coal Terminal, coal for delivery to Amsterdam,Rotterdam,Antwerp, ICAP Plc,GFI Group Inc, Spectron Group Limited, Tullett Prebon Plc, Credit Suisse Group AG,

South Africa coal price fall draws out Indian buying

Thu Feb 10, 2011 2:41pm GMT
LONDON (Reuters) - A fall in South African thermal coal prices to $113 a tonne this week has started to draw out Indian buyers who have been sidelined since November, Indian traders said on Thursday.
Spot coal prices topped $120 a tonne in December from $90 in October on strong Chinese spot imports and spiked again in January after disastrous Australian floods.
During this period, Indian end-users stayed firmly out of the market and relied on stockpiles, deliveries of term contract coal and cheaper coal from Indonesia instead.
India's share of South Africa's coal exports has risen from almost nothing five years ago to an average of 30 percent a month.

The participation of these buyers and the Indian traders who supply them is also a crucial element of the global spot market - their withdrawal usually triggers a fall in prices but panic-buying and bullish sentiment was overwhelming last month.
"At these prices of around $113, $114 a tonne FOB Richards Bay some more people are looking to buy South African coal now, it's not a bad price," one of India's biggest trader importers said.
"Between December and February there were no physical demand reasons for prices to up $24 and then down $20, it was all artificial," he said.
India's Binani Cement Ltd this week bought a March loading South African cargo at $114 a tonne FOB, traders said.
A few of the smaller to medium-sized cement makers are likely to issue tenders now to take advantage of falling coal prices and extremely weak freight, traders said.
Indian end-users tend to focus on the delivered cost of coal and their trader suppliers are constantly comparing the cost plus freight of South African versus Indonesian coal.
There had been some fairly active re-selling of South African cargoes back to the original suppliers in January by Indian traders who replaced these cargoes with Indonesian material but this has dried up now, Indian traders said.

"We did see some of that last month but nothing much now," one South African producer said.
"It did make sense to take cheaper Indonesian. The freight was also more stable but current South African prices are not bad and the market looks like it's going to fall further anyway," another Indian trader said.

South African coal is preferred by many Indian end-users in the sponge iron and cement sectors for its consistent quality but because the market is so price-driven, consumers will switch quickly if delivered costs rise to unacceptable levels.
Prices are expected to come under further downward pressure as Indonesian exports start to flow again following confusion over export licences.
Around 3.5 million tonnes of mostly low-grade coal was held up but this is starting to move again.(sourced:Thomson Reuters)