Gold Fields Says Will Not Entertain Wage Demands

Gold Fields is not willing to consider South African strikers' demands for a minimum wage of 12,500 rand a month, the chief executive of the world's fourth largest producer said on Tuesday.

"Clearly at this stage, we will not entertain any of that. We have a two year wage deal that expires on the 30th of June next year, and as far as I am concerned, that's it," Nick Holland told Reuters Insider on Tuesday.

Gold Fields' KDC West operations in South Africa have been halted by an illegal strike by 15,000 workers for over a week, part of a wave of wildcat action roiling the industry that has seen 45 people killed in labour violence around mines operated by platinum producer Lonmin.

Holland said Gold Fields might be able to afford higher wages but there was a limit after several years of above-inflation pay rises combined with soaring costs on other fronts such as power rates.

Meeting the minimum wage demand of 12,500 rand would "put us out of business. It would triple the entry wage and more than double our wages," he said.

"Wages in South Africa make up about 55 percent of your costs. So it just puts you out of business."

Holland also said the demands were unrealistic because they included an exemption from paying taxes on bonuses.

The strike at KDC West followed one that lasted a few days at its sister operation. Both started initially because of rank and file discontent with the branch leadership of the dominant National Union of Mineworkers (NUM).

Gold Fields is losing about 1,400 ounces a day to the strike, close to 15 percent of group production, but its other operations can help sustain the company, Holland said.

"We could go on for quite some time. We are a very strong company financially," Holland said.

REUTERS