De Beers signs wage agreement with NUM

De Beers has reached an agreement with South Africa’s National Union of Mineworkers (NUM) to increase wages to 12% and avert a strike.

JOHANNESBURG (Reuters)  - 

The world's biggest diamond producer, De Beers, said on Thursday it had agreed a new wage deal with the mineworkers union for an increase of 12 percent, averting a strike at its mines in South Africa.

The deal was clinched within hours of the planned strike, after De Beers had earlier expressed optimism that it would make an attractive offer to break the deadlock. The NUM had planned to launch a one-day strike beginning Thursday evening.

The National Union of Mineworkers (NUM) had demanded a 13.5 percent wage increase for workers over one year against an offer of 11 percent over two years by De Beers.

The union called for the strike after an arbitration authority failed to mediate the dispute.

De Beers said the NUM had notified the diamond producer in writing that it had accepted the new deal, which will cover 2008, and is backdated to May.

De Beers, which is 45 percent owned by mining group Anglo American <AAL.L>, offered a raise of 11 percent over two years.

"Therefore the notice of industrial action scheduled for 18:00 (1600 GMT) on Thursday 24 July has been withdrawn by the NUM," De Beers.

The company said there were 2,612 employees on De Beer's six mines in the bargaining unit represented by NUM.

De Beers employs 4,198 people in seven mines in South Africa - Venetia and The Oaks in Limpopo Province, Voorspoed in the Free State province, and Finsch, Namaqualand, and Kimberley Mines in the Northern Cape province.

Voorspoed mine, which has just been commissioned, did not have any NUM representation.

"We are excited that we have resolved the dispute, but we are also disappointed that it took a threat to strike to get De Beers to give us a better deal," the NUM's spokesman, Lesiba Seshoka said.

"In future, if De Beers takes similar chances to try to negotiate a last minute deal, we shall still go ahead regardless of whatever offer they will have put before us."

Miners in South Africa have been demanding double-digit wage increases to soften the blow of rising fuel, food and electricity prices and a string of interest rate hikes that have made house and car loans more expensive.

South Africa's inflation rate is hovering around 11 percent.

Workers across the country have started a series of rolling strikes to protest the cost of living. The powerful Congress of South African Trade Unions is spurring the protests, which will culminate in a national strike next month. (Reporting by James Macharia and Paul Simao; editing by Michael Roddy)

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