Zimbabwe's miners trapped in currency vice

Johannesburg - The bitter battle between Zimbabwe's mining industry and the country's government over changes to the exchange rate regime has brought desperately needed wage adjustments to a halt and cast a shadow over 55 000 mineworkers who now face the unemployment line.

The Associated Mineworkers' Union of Zimbabwe (Amwuz) said yesterday that miners were living in abject poverty, with the lowest-paid worker earning little more than Z$18 000.

The official exchange rate is Z$55 to a US dollar, but on the parallel market US$1 fetches between Z$1 500 and Z$2 000.

Edmund Ruzive, the president of the Amwuz, said wages were being negotiated twice a year and the latest round of wage increases should have kicked in at the beginning of this year.

Representing 20 000 miners, Amwuz is demanding a 150 percent increase for workers, in line with the country's inflation rate.

But the Chamber of Mines of Zimbabwe warned that there would be no negotiations until there was some agreement between the mining industry and the government on the new foreign exchange controls.

Zimbabwe's mining industry, which accounts for about 45 percent of the country's foreign currency earnings, has been told that 50 percent of all its exports must be remitted at the official exchange rate of Z$55 to US$1.

Mining companies have put forward a proposal that the government devalue the local currency to Z$720 per US dollar as the first step in solving the country's currency crisis.

The industry's proposals were presented to the government in December and it is still awaiting a response.

Exporters were previously required to surrender 40 percent of their foreign currency, which left more to be traded on the parallel market.

According to the Business Tribune, Zimbabwe's weekly financial newspaper, labour costs rocketed 586 percent between 2000 and October last year.

Meeting union demands would mean that wage bills would swell further. Mining companies, which were laying out Z$990 million a month, would now have to fork out about Z$1.54 billion a month - or $28 million.

The same wage bill in South Africa, where the lowest paid mine worker receives R2 000 a month, would set a mining company back R110 million (or about US$12.5 million).

But a loaf of white bread costs about R3.90 in South Africa and about Z$120 in Zimbabwe.

"Workers are simply saying they want a living wage," Ruzive said.

He said the union, which was finding it difficult to explain the wage freeze while families were starving, had warned that lack of action could lead to civil unrest.

South Africa's National Union of Mineworkers (NUM) said it had not yet been asked to come to its neighbour's aid.

Moferefere Lekorotsoana, the head of publicity and information at the NUM, said the union could not discard the possibility of retrenched Zimbabwean miners flooding the South African job market.

But Lekorotsoana said that the domestic mining industry, which has halved its workforce in the past decade, had left its own trail of high unemployment.

He said not even skilled local mineworkers were finding work.