-- Posted Wednesday, 20 June 2007 | Digg This Article
And away we go…
The unions in South Africa representing coal and gold miners have sent their initial demands to the mining company representative group, the Chamber of Mines, to kick off the negotiations for a new contract. The old two-year contract expires on June 30th when 160,000 workers will walk off the job if no new agreement is in place. The initial comment by the Chamber of Mines representatives on the issue is below…things are not starting out on the right foot. Now we wait for the company response to the 15% wage increase demand. It is believed that the companies will offer between 5-6% wage increases either today or tomorrow. South Africa is the largest gold producing country in the world, comprising over 10% of annual global output. A strike of any length of time will significantly impact global supplies and help drive prices higher.
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Represented by the Chamber of Mines - AngloGold Ashanti, Gold Fields and Harmony - will be responding to demands tabled on Tuesday by the National Union of Mineworkers (NUM), Solidarity and the United Associations of South Africa (Uasa).
"It is mind-boggling how many demands have been tabled by the unions," Dr Elize Strydom, the chamber's industrial relations adviser and chief negotiator for the gold mining companies in the talks, told I-Net Bridge.
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While the gold and coal miners begin their fight with the mining companies, the platinum miners are continuing theirs with labor unions. AngloPlat and Implats are negotiating wage increases with representative unions and not making much headway at present. The negotiations are currently stalled and union contracts will expire at months end. While South Africa makes up a large portion of gold production on a global basis, it dominates platinum production, supplying between 75-85% of annual platinum production to the market.
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New Metal ETFs are launching today in Italy. We'll keep an eye on their performance over the coming weeks. With the recent advent of PGM ETFs in the UK, German and Italian trading bourses, the PGM markets are beginning to see an up tick in demand via new sources. It will be important to watch just how much physical metal gets removed from the market by these new ETFs. Again, US investors are left playing PGM markets via physical metal, futures contracts and a couple of mining stocks.
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While it seems to be getting left out of the news lately, we're still as bullish on silver as any other precious metals at present.
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We have the EIA supply data hitting the tape at 10:30 AM EST today. With oil prices hovering around $70 per barrel on both the Brent and WTI crude prices, any unexpected numbers could set price movements off, affecting precious metals markets. Around the same time, we'll have the close of the London market. Our thesis of 75% of daily market lows being made during the open hours of the London market has continued to hold true over the last 6 months.
