HARARE - Zimbabwean mining houses are crying foul over the recent 1,5 percent wage increase awarded to mine workers last month.
The latest salary increase — heavily lobbied by the Associated Mine Workers Union of Zimbabwe — will see the lowest paid worker earning a monthly salary of $251,72 from the previous $248.
However, the Chamber of Mines said the latest development, coming at a time when the sector is facing numerous bottlenecks such as low mineral prices for most metals on the international market and power shortages, will affect operations.
“The increase came at a time the mining industry is facing viability challenges. Most mining houses are unable to pay the existing wages and others are currently downsizing,” Chamber of Mines chief executive Isaac Kwesu said.
For instance, the collapse in metal prices saw Zimbabwe’s largest platinum miner, Zimplats, deferring its project to set up a base metal refinery by almost a year after it recorded a $0,6 million loss in the half-year to December 2015.
Kwesu added that there were high chances that most local miners will apply for exemption to pay salaries due to the current harsh economic challenges.
“The sector has been generous and increased the minimum wage more than nine times in the past seven years with a cumulative increase well above 600 percent since 2009,” Kwesu told agencies.
This comes after the chamber had initially proposed a reduction in the minimum wage, with the union demanding the minimum wage be pegged at the poverty datum line (PDL) which would represent a 95 percent increase in the minimum wage.
After further meetings, the chamber said it would not increase the minimum wage while the mine workers had reduced its demands to a six percent increment in wages.
Information at hand shows that the mining sector output recorded a negative growth of around 3,4 percent and 2,5 percent in 2014 and 2015 respectively as most minerals recorded declines in output, led by chrome which reported the largest decline of 48 percent in output followed by coal and diamonds at negative 31 percent and negative 30 percent respectively.
A 30 percent increase in production was only recorded on gold followed by a modest one percent growth in platinum while copper production remained flat in the period under review.
“The impact of the declining metal prices on cash flows has resulted in the reprioritisation of capital projects with some projects being deferred to future periods,” he said.