JOHANNESBURG (miningweekly.com) – Kumba Iron Ore and trade unions, the National Union of Mineworkers (NUM) and Solidarity, have signed a three-year wage agreement that would result in increases of between 8.5% and 10% in the first two years and between 7.5% and 9% in the third year for employees.

The agreement was effective from July 1, 2014 to June 30, 2017.

“We would like to thank the NUM and Solidarity for the constructive way in which they have approached the negotiations. While robust and challenging, this demonstrates that the bargaining system is sound and capable of delivering negotiated agreements that take the needs and priorities of all parties into account,” commented Kumba CEO Norman Mbazima.

Solidarity head of mining Deon Reyneke said this agreement was more favourable than the mandate Solidarity had received from its members.

“The agreement constitutes the outcome of successful negotiations and is undoubtedly the best we could do for our members. The agreed increase is 0.5% more than the mandate of 8% we received from our members,” he explained.

The NUM, meanwhile, said the wage deal would see its lowest paid workers’ combined basic earnings and housing allowances increase by an average 17% a year.

In line with this agreement, the total guaranteed earnings – which comprised a worker’s basic salary, housing allowance, monthly production bonuses and shift allowances – of Kumba’s lowest paid workers would increase from R8 971 a month to R10 945 a month in year one, R12 248 a month in year two and R13 443 a month in year three.

The NUM also pointed out that the union and the company had agreed to phase out the entry-level worker in Kumba and move all employees to the next level effective from July 1, 2014.

“The NUM is on track to achieve a massive reduction in inequality of pay of workers, with the lowest-paid benefiting the most,” it stated.

Meanwhile, increases obtained for higher-level workers ranged from averages of 8.8% to 14.2% a year.

The union also noted that over and above the guaranteed earnings, NUM members would also receive employee stock ownership plan payouts every five years, with the next payout scheduled to take place in 2016.

The employees would also still receive quarterly performance bonuses.