No one has more to lose from gold’s bear market than South African producers as workers digging in the world’s deepest, costliest mines threaten to bring them to a standstill unless pay is more than doubled. “Anything below $1,400 an ounce is sort of a red line” for South African gold producers, said David Davis, a Johannesburg-based analyst at SBG Securities. “There’s a vast difference between what labor unions are demanding and what South African mines can afford. It points towards long drawn out negotiations that could end in dispute.” Strikes and related violence at mines last year that left at least 44 dead knocked 0.5 percentage point off economic growth, according to the National Treasury, and led to pay gains for some of about double the pace of inflation. South African costs are steeper than peers abroad because of the higher levels of labor needed to dig its aging mines. Gold companies employ 142,000 people in the country.
Posted on: Wed, 26 Jun 2013 09:18:00 +0000
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