Paladin Africa and its local workforce have differed on circumstances that led to the employees downing their tools at the mining site last Friday.
The employees at Malawiâ€™s largest mining investment, Kayelekera Uranium Mine in Karonga, last Friday walked off the mine site, an industrial action that resulted in the uranium production being shut down.
While the company says the action started after it refused to give in to workers’ demand for 66 percent salary increase following the devaluation of the kwacha last week, employees dispute that, saying the company’s budget and functional currency are in US dollars; hence, the devaluation meant automatic salary adjustments.
“On Friday, May 11, the majority of the local workforce at Kayelekera walked off the mine site in protest of the company’s refusal to accede to an unprecedented demand to grant an immediate 66 percent pay increase [pegged in US dollars] following the recent 50 percent devaluation of the national currency, the kwacha, by the Government of Malawi,” said Paladin Africa managing director John Borshoff in a statement on Monday.
Borshoff described the demands as unrealistic and “extremely” unfortunate, saying the striking workforce was provoked by a small “militant core”.
He said the employees gave the company a 24-hour ultimatum to respond to their demands.
But according to a letter dated May 10 and sourced by Business News on Monday, analysing the effects of the devaluation, the employees say their action is not a request for salary increment as claimed by management.
“As you are aware, the Malawi kwacha was devalued on Monday, May 7 2012 to K250 per USD [United States dollar] which effectively means national employees’ remuneration has been almost halved.
“Understanding that this is an international company and that the budget and functional currency are in US dollars, we national employees are of the opinion that our salaries should be adjusted in line with the devaluation,” reads the letter in part.
The workers argue in the letter that the company will not suffer any loss from the adjustment as their salaries are already in US dollar as reflected in the company’s budget.
Chairperson of the company’s Local Staff Association, Emmanuel Makolo, declined to comment on the letter on Monday, saying management is better placed to speak on the issue.
But Borshoff said in his statement that expatriate workers, mining contract staff, security, essential services and other local employees have remained at or returned to work in the interim.
“Paladin has informed the Government of Malawi of this illegal industrial action and the Ministry of Labour will dispatch senior industrial relations officers to Kayelekera to address the situation with the workforce on TuesdayÂ when they are expected to return to work,” he added.
He also said unscheduled plant maintenance was performed during the period of strike and that the plant is expected to operate at about 65 percent capacity until striking national employees return to work.
He added that despite such a dispute, the company remains confident of early resolution towards the issue which he said essentially involves national rather than workplace-related issues.
Borshoff said Kayelekera Mine has been producing on target, but lamented that it is a pity that such an outstanding performance is likely going to be marred by the industrial action.
“While it will have some impact on the company’s total annual production results, we do not believe this will be significant if our national employees heed the advice of government officials and return to work on Tuesday, 15 May 2012,” he said.