CARLETONVILLE , South Africa — THOUSANDS of South African gold miners went on strike yesterday after wage talks broke down, a union said, threatening to cause millions of dollars in lost output in the troubled sector.

Powerful labour group the National Union of Mineworkers (NUM) — which represents the bulk of affected workers — called for stoppages following its members’ rejection of a 6.5 per cent wage hike last week.

“Our members have not clocked in for the night shift, at several mines in the Carletonville area. The strike is on,” Mbuyiseli Hibana, NUM regional secretary general, told AFP.

Hibana estimated that around 14,000 miners had downed tools.

The gold sector stands to lose 761 kilogrammes in production each day, worth around US$34 million, gold industry spokeswoman Charmane Russell told AFP.

Details on how the stayaway had affected the industry — which includes producers such as Harmony, AngloGold Ashanti, and Sibanye Gold — were expected later yesterday.

NUM spokesman Lesiba Seshoka said early yesterday that the strike would kick off on the 6:00 pm (1600 GMT) shift. “We will go until Christmas,” he told AFP.

Gold workers are demanding wage increases of between 60 and 100 per cent, denouncing company executives’ high salaries while workers live in poverty in a country with one of the world’s biggest wealth gaps.

“The pay that we are asking for is not high. It is normal and reasonable,” said Seshoka.

“If there are bosses that sit in air-conditioned offices earning millions a year, why can’t they (miners) earn 7,000 (US$700) basic a month?”

The strikes will add to the pressure building on Africa’s largest economy, where at least 75,000 workers in the construction and automobile industries have downed tools since last week.

The stoppages have become a frequent occurence during annual wage negotiations, but this year’s strike comes amid sluggish growth and rampant unemployment.

“Our most important industry is in crisis, and we have not yet found how to stem the tide of destruction,” said Anglo American CEO Mark Cutifani in an opinion article in Business Day newspaper.

South Africa was for decades the world’s largest gold producer, but its share of production has shrunk from 68 per cent in 1970 to six per cent of the world total last year.

Falling gold prices, a declining grade of ore, and some of the world’s deepest mines are all factors that have constrained gold firms’ profits.

In part because of strikes, gold production last year fell by 12.4 per cent to 167.2 tonnes — its lowest level in over a century — and cost the economy half a billion dollars.

But workers insist their dramatic pay demands are justified after a history of cheap black labour built the continent’s most sophisticated economy.

“It is true that there are legacy issues that we must deal with,” wrote Anglo American’s Cutifani.

But as rival unions inflate wage demands in competition for members, he warned labour leaders against creating unrealistic expectations.

“Promoting expectations above the capacity of the industry to pay is a dangerous road that may have tragic consequences for employees who do not understand how close we are to economic devastation in certain sectors,” he wrote.

Seven gold-mining firms, including giants AngloGold Ashanti and Gold Fields, offered a maximum of 6.5 per cent pay raise.

The industry’s latest offer guarantees average pay of 9,170 rand (US$882) a month and profit-sharing schemes.

But the NUM’s Seshoka said the figure was misleading.

“They are combining everything, including medical aid and living out allowance,” he said.

If the downward spiral continues, the gold sector may employ only 60,000 people by 2020, according to the Chamber of Mines.

But Cutifani said it had the potential to create 260,000 jobs by then if the industry, Government and labour groups could reach a workable plan.

“We could make sure we help another 2.6 million South Africans out of abject poverty, he said.”