Gold Supply in Danger as South African Labor Dispute Turns Deadly | Gold IRA Guide
Top

Gold Supply in Danger as South African Labor Dispute Turns Deadly

Gold IRA Guide / In the news  / Gold Supply in Danger as South African Labor Dispute Turns Deadly

Gold Supply in Danger as South African Labor Dispute Turns Deadly

Tragically, things have taken a turn for the worse in South Africa’s mining labor dispute. However, there are fears that this is only the beginning that “may lead to a serious bloodbath in Rustenburg”.

The mining industry in South Africa is not only vital to the country’s economy but also to the world’s gold supply. South Africa is the world’s third largest producer of gold, mining over 300 tons of the precious metal a year. With these recent events, gold dealers are left to wonder where they would be able to purchase the precious metal in order to satisfy the growing demand of their customers.

Underground South African Miners at Work

The mining industry in South Africa is on the verge on chaos as an appalling murder on Monday could spark a new round of violence between two of South Africa’s largest mining unions. In the mist of possible wide-spread violence, the unions and gold companies are set to resume their negotiations over a possible wage increase today.

To get caught up on the South African labor dispute, read my previous blog, which can be accessed by clicking here.

Murder in Rustenberg

With the uphill battle the South African mineworkers’ unions face working out a wage increase with the Chamber of Mines, which represents a majority of precious metal mining companies, one would assume that the unions would be united and work together. However, this is not the case as fighting between members of the different unions has once again turned deadly.

On Monday, a shop steward for the National Union of Mineworkers (NUM) was murdered during broad daylight near Lonmin’s Roland shaft in Rustenberg. The South African press is speculating that members of NUM’s rival, the Association of Mineworkers and Construction Union (AMCU), are responsible for gunning down the 44-year-old female mineworker. Even the Congress of South African Trade Unions “urged workers to stop killing each other”.

When speaking to South Africa’s Broadcasting Corporation Monday, NUM spokesperson Lesiba Seshoka did not point out the AMCU specifically, but rather voiced his frustration with the police, who know “many of the suspects” but yet “none (have) been arrested or prosecuted”. Seshoka also said “The union (NUM) is concerned that the company’s pre-occupation with profits and the police incompetence may lead to a serious bloodbath in Rustenburg”.

South African Miners Protest Marikana Massacre

This possible flashpoint between these two powerful unions comes at an extremely sensitive time for the mining industry in South Africa. The anniversary of the Marikana massacre, where police shot 34 miners and wounded 78 others during last year’s illegal strike, is on Friday and tension is running high as more violence could break out.

Wage Negotiations Resume Today

The Chamber of Mines and various mineworkers unions will resume their negotiations over a possible wage increase with the Commission for Conciliation, Mediation, and Arbitration (CCMA) today. The CCMA became involved in the negotiations after the parties failed to come to a resolution on their own last month.

The major unions involved – the NMU, the AMCU, and Solidarity – remain undecided on how much of a wage increase is acceptable. While Solidarity wants a 10% pay increase, the NMU has placed hard figures on the table, demanding R7,000 a month for above ground employees and R8,000 for below ground. The AMCU’s demands have been getting more and more absurd with the latest being a 150% pay increase.

Unions officials said that they have been spending as much time negotiating with the AMCU as with the Chamber of Mines. Last week, Solidarity’s general secretary Gideon du Plessis told South Africa’s Fin24 that the unions “feel a bit worried and frustrated at the slow pace (of the negotiations)… the process is not even halfway and we have not made much progress.”

Get Your Free Gold Kit to Learn More About Adding Gold to Your IRA

While the incidents in South Africa are very tragic, they could lead to a tightening of the gold supply around the world. With demand for gold rising around the world, it leaves one to wonder how would be able to supply it if there is a work stoppage in South Africa.

If you are interested in opening a Gold IRA, you can receive more information about the process by requesting the free gold investment kit below.

NickSandles

About NickSandles

Nick has been writing for Gold IRA Guide since 2012. He has a degree in mathematics and a real passion for investing and politics. He specializes in portfolio analysis and providing tips on how to protect a retirement portfolio in an unstable economic landscape.