Dallas, Texas 06/25/2015 (Financialstrend) – South African gold miner Harmony Gold Mining Co. (ADR) (NYSE:HMY) saw a further slump in share prices, as the precious metal mining industry in the country continues to struggle.
Gold producers from the region have been caught in the middle of a major industry overhaul as prices of the yellow metal continue to fall, even as the production cuts overhang. Besides, power outages are taking a toll on the companies operating here. Additionally, wage workers are also part of the turmoil in the industry, by demanding higher pay.
Unions demand higher pay
Harmony Gold Mining Co. (ADR) (NYSE:HMY) and many of the big mining companies of the region are caught up in wage-demand scenario. Unions that represent nearly three-fourth of the total number of gold workers of the country, expect double their current wages. However, industry experts opine that the wage-workers would settle for much lesser.
Apart from Harmony Gold, AngloGold Ashanti (NYSE:AU), Sibanye Gold (NYSE:SBGL) are some of the other gold mining companies engaged in talks with the labor unions.
Industry insiders expect the talks to extend for several weeks and months. However, the strike has led to a string of related problems. The bottom lines of these South African miners are already affected. Besides, the weakness in gold prices has persisted. Additionally, the electricity costs have surged, given the challenging conditions of power outages.
However, wage workers in gold mining companies are demanding that the basic pay for a month be increased by as much as 80%.
Harmony Gold Mining Co. (ADR) (NYSE:HMY) and most other mining stocks felt the repercussions of the fall in talks between Greece and its Europe-based creditors. The US gold futures were down by nearly 0.5% for August delivery. Greece has re-submitted a proposal to help in resolving its debt crisis on Monday. However, the expectations from such a deal, have made investing in gold, not look like a good investment asset.