Dump Freddie and Fannie debt, European Central Bank said to tell members

a href=http://www.reuters.com/newsArticle.jhtml?type=topNewsamp;storyID=3165778...

By Zandile Nkuta

JOHANNESBURG, July 27 (Reuters) -- South Africa's mine
workers' union called off a strike due to start on Sunday
in the gold mining industry, saying employers had met wage
and other demands.

quot;The revised offers by the gold mining employers have been
accepted by a majority of our members, thereby removing
the prospect of a strike in the gold mining industry that
was due to take place tonight,quot; the National Union of
Mineworkers (NUM) said in a statement.

quot;The mining houses, on the outstanding issues of wages
and job grading, have met our demands,quot; the statement added.

Key mining firms AngloGold, Gold Fields, and Harmony Gold
on Saturday offered to raise wages by 10 percent and proposed
to pursue a process to deal with the contentious issue of job
classification, said Chief Negotiator Frans Barker of
employers' group the Chamber of Mines.

The NUM said its members -- except those at two relatively
smaller mines -- would receive a minimum 10 percent increase
in wages and the companies would deal with the grading issue
by December.

The NUM insists that machine workers should jump two grades
from the second lowest grade, but the chamber says this would
in effect push up the wage hike by another 10 percentage
points.

The mining firms have offered to increase grading by one step.

Mineworkers, citing a surge in inflation last year and a
rally in gold prices since the last pact in 2001, initially
demanded a wage hike of 20 percent in talks that began in May.

Employers started with a 7 percent offer. South Africa's
annual consumer inflation rate is currently running at around
8 percent.

The three companies were engaged in separate talks with the
NUM, and subsequently made improved wage offers ranging
from 9.5 to 10 percent for the coming year.

AngloGold, the world's second biggest gold producer, was the
only firm to meet the union demand for a 10 percent wage hike
in negotiations earlier in the week, but this offer depended
on the union accepting a complete package, including job
grading.

Both sides were under pressure to settle. The first major
stoppage in the industry in 16 years, by around 100,000
employees at the three firms, would have cost the sector
millions of rand per day.

Talks under similar circumstances two years ago also went
to the wire, when the industry averted a strike with an
eleventh-hour deal.

A new wage pact is expected to have less impact on profits
for AngloGold, which produces over 40 percent of its gold
outside South Africa, analysts said.

Harmony, the world's sixth-biggest bullion producer, would
be hardest hit by wage hikes due to its more marginal
operations and high exposure to South Africa, other analysts
said.

Gold Fields, ranked fourth globally, falls somewhere between
the other two in terms of the impact of higher labour costs.

Mine owners say they can ill afford higher labour charges,
which make up around half of gold production costs, especially
at a time the strong rand has depressed revenue from gold,
which is sold in dollars.

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