Gold workers hit pay dirt (sort of)
The price of gold has more than doubled in recent years, but that hasn't translated to double the profits for producers and certainly not double the salary for workers. But they are getting 8 to 10 percent raises. Gretchen Wilson reports.
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Doug Krizner: Today, South Africa's National Union of Mineworkers signs wage agreements with the country's largest coal and gold producers. The price of gold has more than doubled in the past five years. It's trading around $667 an ounce. You'd think with soaring prices, producers would be flush with cash. Gretchen Wilson reports from Johannesburg.
Gretchen Wilson: The union's accepted pay raises of between 8.5 and 10 percent for workers in the gold sector.
That's less than the 15 percent they've been demanding since June, but gold producers say they've been suffering from declining reserves, plus soaring costs for fuel, steel and chemicals.
Muneer Ismail is an analyst with Deutsche Securities in Johannesburg.
Muneer Ismail: For example, you've got China which is demanding a lot of metal, be it copper or iron ore, there's quite a demand for materials out there. So whether it's mining skills or materials, we've seen a cost inflation rising well above current local inflation levels across the board on most items.
Gold companies say these costs have eroded some of the profits they could have made out of the recent spike in the gold price.
The union admits the gold firms aren't doing as well as their counterparts in platinum and coal, but they say workers aren't rolling in cash, either. Some gold employees are still earning less than $500 a month.
In Johannesburg, I'm Gretchen Wilson for Marketplace.
