S. Africa Gold Strike Talks Fail With 50% of Output Shut
Africa’s largest gold producers will pursue legal remedies instead of continuing talks with unions after South African strikes widened, idling half of the nation’s output of the metal, the Solidarity union said.
AngloGold Ashanti Ltd. (AU), Gold Fields Ltd. (GFI) and Harmony Gold Mining Co. (HAR) will “look at a new negotiating model once order and stability is restored,” and won’t raise an earlier offer to workers, Gideon du Plessis, the head of Solidarity, said by mobile phone today. He commented after talks between the Chamber of Mines industry body and unions including the largest, the National Union of Mineworkers, or NUM.
Platinum, iron ore and chrome mines have also been disrupted by stoppages as miners bypassed unions to demand above-inflation pay increases in South Africa, where consumer prices rose by 5 percent in August. More than 44 people have been killed as associated protests turned violent. The nation’s sovereign rating was cut last week by Standard & Poor’s, which cited concern that strikes are causing political and social unrest and adding pressure on government spending.
Workers resumed an unauthorized strike at the East section of Gold Fields’ Kloof-Driefontein Complex late yesterday, the company said. Production at the entire complex, Africa’s largest gold mining operation, has now been suspended as about 19,500 of the complex’s 26,700 workers are on strike, it said.
“The current impasse is extremely unfortunate, not only for the industry and its employees, but also for future growth and development in South Africa, given the critical role that gold mining plays in our country’s economic development,” Elize Strydom, the mines chamber’s senior executive for employer relations, said in an e-mailed statement.
Workers last week rejected gold producers’ offer to raise pay this year by more than levels agreed to earlier. All of AngloGold’s local operations were halted by wildcat strikes by Sept. 25. The company, the world’s third-largest gold producer, is losing 30,000 to 32,000 ounces a week.
AngloGold produced about 306,000 ounces in South Africa in the first quarter. Gold Fields’ KDC and Beatrix mines produced about 328,900 ounces, while Harmony’s Kusasalethu mine, also on strike, yielded 39,256 ounces. The nation’s gold output was 1.35 million ounces in the quarter, according to the chamber. It was the fifth-largest gold producing country in 2010, GFMS Ltd. data show.
The NUM, which has been trying to regain control of workers who started their own, unauthorized strikes, called today for employers to resume talks.
“Dismissals would not be a solution to the current challenges facing the industry and it would only serve to fuel emotions that are already high and inflame the situation further,” the NUM said in an e-mailed statement.
Gold producers had offered to scrap entry-level wages, bump workers up to the next band of pay and to award other workers an additional 1.5 percent to 2 percent pay increase. The companies had agreed last year to boost their pay by between 7.5 percent and 10 percent for 2012.
Anglo American Platinum Ltd. (AMS), the world’s largest producer of the metal, fired 12,000 employees on Oct. 5 for striking illegally. Stoppages at its mines in South Africa have idled more than a fifth of global platinum output.
At Sishen, South Africa’s biggest iron-ore operation, the Labour Court ordered that a group of 120 miners must leave a dump where they’ve been stationed with about 3.3 billion rand ($377 million) of machinery they seized, said Gert Schoeman, a spokesman for Anglo American Plc (AAL)’s Kumba Iron Ore (KIO) unit, which runs the mine.
The workers have been on an unprotected strike, where resolution processes required by labor law haven’t been followed, since Oct. 3. They had been given until noon to report for disciplinary action, Schoeman said. The group, which previously numbered as many as 300, had taken equipment including bulldozers and 88 haul trucks, bringing work to a halt.
South Africa’s longest widespread mining strike was in August 1987, when 250,000 workers across the gold and coal mining industries stopped work for three weeks, according to AngloGold.
Gold Fields declined for a second day, losing 0.7 percent to 105.95 rand by the close in Johannesburg.
Meanwhile, most truck drivers returned to work today after a three-week strike, Vincent Masoga, a spokesman for the South African Transport and Allied Workers’ Union, said by mobile phone. A sympathy strike by port and rail workers planned for today was called off after drivers won an average annual pay increase of 8.7 percent for three years, Masoga said.
The South African Municipal Workers Union is consulting its more than 200,000 members on whether to go on strike to push for pay to be standardized across the country and brought in line with private-sector wages, said union spokesman Tahir Sema. The union expects a decision by the end of the week.
Workers in the North West and Limpopo provinces have staged protests to highlight their demands, while employees of Johannesburg’s rapid bus transport system have already started a strike, Sema said by phone from Johannesburg today.
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