South Africa's gold producers said on Friday (August 30) in a statement that the National Union of Mineworkers (NUM) had served notice of a strike over pay demands starting from the night shift on Tuesday.
Affected companies include South Africa's four main gold producers, AngloGold Ashanti, Gold Fields, Harmony Gold, Sibanye, and some smaller operations.
The country's Chamber of Mines, which negotiates on behalf of gold producers, said on Tuesday it had made a final offer to unions to increase basic wages by between 6 and 6.5 percent.
"Our shareholders, and here I must speak on behalf only of Harmony, Anglo GoldAshanti and Sibanye, have indicated that they will not entertain above CPI increases," said Harmony chief executive Graham Briggs, speaking on behalf of the gold producers represented by the Chamber of Mines of South Africa.
Wage talks between the NUM -- which represents about 64 percent of the over 120,000 workers in gold mining -- and the companies broke down last week.
A complete shutdown of the gold sector of indeterminate duration could cost South Africa more than $35 million (22 million pounds) a day in lost output, according to calculations based on the spot price. This will put pressure on a struggling economy already weighed down by a ongoing strikes in auto manufacturing, construction and aviation services, and facing potential strikes from textile workers and petrol station employees.
"Every month the gold mine sector is on strike, it doesn't produce, we lose six billion rand in foreign exchange in this country, that's foreign exchange that will not be replaced, six billion rand per month foreign exchange from the gold sector," Briggs said.
NUM has been seeking a 60 percent increase while a more hardline rival wants pay hikes of up to 150 percent. The companies say these demands are unrealistic, given rising costs and falling bullion prices.
"The strike is continuing, 90 000 is down and will continue to be down until a solution is found. We are continuing to interact with each other, we have done that over the weekend they moved to 7,5 its not enough yet and we are hopeful that if they continue to increase then we may have to consult our members to get their feelings," said NUM's spokesperson Lesiba Seshoka.
On Friday, Anglo American Platinum, the world's top platinum producer, said it could cut about 4,800 jobs, laying off 3,300 workers and paying off the rest, and will redeploy 1,600 more.
Job cuts are a sensitive issue in South Africa, where the unemployment rate is more than 25 percent and mine labour violence rooted in a union turf war has killed dozens of people over the past 18 months, mostly on the platinum belt.