Labour strike at Egypt Sukari gold mine enters fourth day

A labour strike by hundreds of workers at Egypt's southern Sukari gold mine to demand better pay and the reinstatement of laid-off workers entered its fourth day on Wednesday.

Workers demand that the company pay them a hazard allowance, as is stipulated by a 1981 law, equivalent to 30 per cent of their total monthly salaries. They also demand a share of company profits.

The mine, located in Egypt's Red Sea city of Marsa Alam, is operated by Centamin-Egypt, a joint venture between the Egyptian government and an Australian gold mining company.

A 1981 labour law, issued specifically for mine and quarry workers, established a wage structure for those working in the industry. The legislation has not been amended since it was issued almost 30 years ago, meaning that the salary-structures stipulated therein are significantly outdated.

"We don't pay our workers what is stipulated in the law, because that would be peanuts," said Sami El-Raghy, Centamin's long-serving chairman and a major shareholder in the company. "The salaries and benefits we currently give our employees are far higher than those set by the law."

El-Raghy says workers should not ask the company to abide by certain articles of the law while ignoring others. He pointed out that the minimum monthly salary given to mine workers was LE2,500 (roughly $416), which is considerably higher than the maximum amount laid down by the 1981 law.

"A newly-employed worker makes more money than the head of the Egyptian Mineral Resources Authority in Marsa Alam," El-Raghy added.

Centamin issued a statement on Wednesday blaming the ongoing strike on a "small percentage" of the mine's workforce. El-Raghy described the strike's instigators as "hooligans" who the company plans to "get rid of at any cost."

Egypt's currently-dissolved People's Assembly (the lower house of parliament) had proposed a new mining law, but this failed to materialise due to "time constraints," Abdel-Aziz Negeida, head of parliament's committee on energy and industry, told Ahram Online.

"The current law is definitely unfair; I expect new legislation to be passed once a new parliament is formed," Negeida added. "Until then, it will be very difficult to arrive at a solution that satisfies all concerned parties."

The mine was recently at the centre of controversy following allegations that Centamin had intentionally squandered some $127 million between September 2009 and March of last year.

Production at the Sukari gold mine reportedly rose by 9 per cent in the first quarter of 2012 (ending 31 March). Nevertheless, the company's pre-tax profits fell to $54.3 million in the same period, down from $56.1 million for the first quarter of last year, offsetting gains from rising global gold prices.

Shares in Centamin are currently traded on the London Stock Exchange at £0.63 each.