De Beers (Stock Quote: DBRSY) has agreed to pay a 9% increase in wages to South African workers. The news was made public on Friday by the worlds largest producer of rough diamonds.
The trade union for tha workers have initially demanded for a 15% pay hike but later dropped it to 9% because the industry has been hit by the global recession. The recently released inflation figure in South Africa is 8%.
De Beers had previously said that as part of its overall cost saving measures due to the decline in demand for diamonds it will not pay out bonuses or increase pay in 2009.
De Beers is Co-Owned by Anglo American (45%), Government of Botswana (15%) and the Oppenheimer family (40%).
According to De Beers all the members of the National Union of Mineworker’s at the DTC South Africa and De Beers Consolidated Mines Ltd will now receive a monthly minimum wage of ZAR 5000 ($617) while miners in higher categories will receive ZAR (Rand)9,277.
Peter Bailey, the Chief Negotiating Officer of the union said that “This is a good settlement and when the ship (De Beers) is safe we will do even better”.He also noted that the union had to make a compromise because one of the hardest hit industries by the global recession is the diamond industry. Negotiations has been going on throughout the week.