11/07/2018 07:30 BST | Updated 11/07/2018 07:31 BST

'Three-Quarters Of SA Gold Mines Unprofitable - Minerals Council of SA

Was wage negotiations in the gold sector kick off, the Minerals Council of SA has warned that the industry is bleeding jobs.

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Men at a gold mine, Free State.

As wage negotiations between gold mines and unions kick off on Wednesday, the Minerals Council of SA has revealed that about three-quarters of South Africa's gold mines are unprofitable or hardly making any money, Business Day reported.

The opening demands from the two biggest unions, the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu) are unrealistic, the council reportedly said.

NUM is reportedly entering the wage negotiations with a demand of a basic salary of R10,500 for its members. It is currently R7,785. Amcu wants a basic salary of R12,500 a month.

According to Business Day, an increase of these proportions could force marginal mines to shut down, in a sector already bleeding jobs.

The sector reportedly employed 392,000 people in 1994 and now employs just 111,800, and the number is decreasing. Pan African Resources shut its Evander gold mine, while Sibayne-Stillwater's Cooke mines have also reportedly closed.

The council will reportedly counter-offer with a consumer-price-index linked increase of around 6 percent or 7 percent.

According to Fin24, NUM's opening demand is for an underground worker, but it wants a basic salary of R9,500 per month for an entry-level surface worker and a 15 percent wage hike across the board.

Motsamai Motlhamme, head of employment relations at the council, reportedly said the parties need to "find common ground in the interest of the sustainability of our industry".

Around 200 employer and employee representatives are set to start the negotiations on Wednesday at the Birchwood conference centre in Boksburg on Wednesday, reported Creamer's Mining Weekly.

Gold miners AngloGold Ashanti, Harmony Gold, Sibanye-Stillwater and Village Main Reef, will attend.

NUM, the majority union in the industry, wants the mining companies to contribute 70 percent of workers' medical aids, The Sowetan reported.

NUM tweeted on Tuesday that miners' waged remained too low.