Thungela Resources signed a three-year wage agreement with the National Union of Mineworkers (NUM) on Tuesday, a move that provides labour stability for the thermal coal exporter amid record high coal prices.
NUM is the recognised labour union across Thungela’s operations, representing 86% of unionised employees.
In a statement, Thungela announced the implementation of the new wage agreement across its operations, other than Mafube, which runs an independent wage negotiation process.
“The agreement is effective from June 1, 2022, and covers a period of three years through to the end of May 2025. The wage agreement increases salaries and salary-related allowances and is expected to increase the total labour cost-to-company, on average by approximately 6% per annum over the three-year period,” it said.
According to the agreement officials, including mining artisans, would get a 7.5% increase in the first year, then a 7% increase in the following two years. The skilled miners would get a R1100 increase for the first year, then an R1000 increase in the next two years.
Under the agreement, Thungela and NUM also commit to engaging the board of trustees of the Saco Employee Partnership Plan Trust (EPP) to review and amend the trust deed to enable the payment of awards made to the EPP in the same financial year in which they are declared, as opposed to vesting over a period of three years.
Thungela CEO July Ndlovu said: “We are very pleased to have reached an agreement with our employees, and I thank the NUM for their collaboration and constructive engagement during the wage negotiation process. The agreement recognises the important role that our employees have in responsibly creating value together for a shared future.”
NUM national education secretary Lefty Mashego said the union was satisfied with the agreement. He said the negotiations took two months.
“The agreement we had expired and it was time to renew it. We are satisfied with the outcomes. We got a mandate from our members to sign the agreement and we did,” he said.
Mashego said it was the first time in many years that there was no third-party mediation.
“There was no talk of tools down or a strike. The agreement will help our members as Christmas is around the corner and we are still recovering from the Covid-19 pandemic,” he said.
The wage deal provides labour stability for the mining firm amid high coal prices.
Coal prices are soaring after Russia invaded Ukraine earlier this year and as Europe scrambles to buy coal after this geopolitical event scuppered its stable supply of gas and coal from Russia.
Benchmark Newcastle coal yesterday surged to more than $440 (R7616) per tonne.
Thungela, driven by elevated benchmark coal prices, last month boasted bouyant interims and declared a whopping interim dividend of R8.2 billion.
For six months to June 30, it flagged a profit of R9.6bn compared to R351 million in the first half of 2021.
It announced a dividend of R8.2bn, or R60 per share, due to profit surging, boosted by strong export coal prices.
It also lowered guidance for shipments as rail constraints continue to hamper its ability to move coal from its mines to Richards Bay, one of the biggest coal terminals in the world.
Thungela expects to export between 13 million and 13.6 million tonnes of the fossil fuel this year, from an initial projection of between 14 million and 15 million.
Thungela shares closed at R373.40 on the JSE on Monday. They have increased by 503.72% in the past year.
BUSINESS REPORT