The net effect of this wage agreement on our bottom line is within the planning and performance parameters we have set for our South African business units

Bobby Godsell AngloGold

AngloGold reached a deal with the NUM last week.

Gold Fields and Harmony, the second and third biggest gold producers in South Africa, are due to report results on Wednesday and Thursday respectively.

Like AngloGold, both companies should benefit from the weakness of the South African rand against the dollar in recent months because they sell their gold in dollars and pay costs, including wages, in rand.

But Gold Fields results might take a hit from a week-long closure at its Beatrix mine after an explosion killed 12 workers.

Gold strike

The NUM has issued formal notice to Harmony, Gold Fields and another miner that 50,000 of its members will strike on Wednesday.

While the three companies failed to reach a deal, an offer by AngloGold and a smaller company of wage rises of 8-9% was accepted by the NUM.

"We are still hopeful a strike will be averted," the South African Chamber of Mines said on Tuesday.

The union wants a 2,000 rand ($244) per month minimum wage and 30 days annual leave for its members.

Over the last five years, South Africa's gold mines have suffered low productivity, diminishing reserves and labour unrest resulting in more than 135,000 job losses.

South African steelworkers are also due to go out on strike, on Friday, after failing to reach agreement on wages with steel and mining group Iscor.

The National Union of Metalworkers had demanded a 15% increase across the board while the company offered 7%.

AngloGold results

AngloGold reported a profit of $66m for the quarter ending 30 June despite lower output from mine closures.

"This has been achieved despite slightly reduced gold production and a lower received gold price," AngloGold said in a statement.

AngloGold chairman and chief executive, Bobby Godsell, said he was satisfied with a wage deal reached with the NUM last week.

"The net effect of this wage agreement on our bottom line is within the planning and performance parameters we have set for our South African business units," he said.

Ashanti earnings

Meanwhile, fellow African gold miner Ashanti Goldfields on Tuesday reported it had doubled profits in the second quarter through increased production, cost cutting and higher spot gold prices.

The Ghana-based company, which has recovered from the brink of bankruptcy in 1999, reported profits of $15.8m.

Ashanti has cut operating costs 7% and benefited from the rationalised of production at some mines.