WORKERS at Harmony Gold’s suspended Kusasalethu mine have been given until March 7 to find a resolution to their complaints or face retrenchment.
Harmony, which faces a cost of about R400m to put the mine, near Carletonville, on care and maintenance and retrench the workforce, issued a section 189 notice to its 6,000 employees at the mine last week, giving them 60 days to respond.
In an open letter in Sunday newspapers highlighting the murder, violence, intimidation and damage to mine property that prompted the decision to suspend the mine, Harmony CEO Graham Briggs wrote : "We now have 60 days to save the mine."
He said on Monday that no company could operate or do business in such an environment. "We can’t continue like this. Yes, it is as stark as that."
Mr Briggs said there had been "next to no initiative" from government departments to assist in finding a solution to the problems at Kusasalethu.
The Department of Labour could not intervene, spokesman Musa Zondi said on Monday, but would monitor the process initiated by the issuing of the section 189 notice, which included the involvement of its unit, the Commission for Conciliation, Mediation and Arbitration. The department has no legal mechanism to force a union to co-operate with a company.
Harmony bought Kusasalethu for R1bn in 2001. A 12-year project to deepen the mine, estimated to cost R2bn, has come to a halt.
Recently, the mine began to ramp up production towards the 260,000oz a year the company believes it can produce, and profits were beginning to flow.
During the December quarter, Harmony lost R252m due to unprotected labour action at the mine, which produces about a fifth of the group’s gold output.
The scale of the violence — including two murders, death threats to management and a disregard for working practices — led Harmony to keep the mine shut after the year-end break.
The biggest change at the mine last year was the growth of the Association of Mineworkers and Construction Union (Amcu), which now represents 62% of the workforce. Membership of the National Union of Mineworkers at Kusasalethu has dropped to 28%. These unions will play a key role at the formal talks about the future of the mine.
Harmony has found Amcu’s leadership difficult to deal with because of its insistence on dealing with past grievances rather than grappling with the more pressing issues of the workforce returning, Mr Briggs said.
Amcu did not respond to requests for comment on Monday.
The first meeting between Harmony’s management and the trade unions, under the auspices of a facilitator appointed in terms of the section 189 notice, is scheduled for Thursday.
Mr Briggs said the meeting was likely to be marked by the "posturing" of union leaders, and he did not believe there was much chance of a positive outcome.
"The tables have turned. It is us, the company, which has demands on the table now, not the unions," he said. "Our demands are that we respect the law, that we are peaceful and respect the Mine Health and Safety Act."
Mr Briggs declined to put a price on the care and maintenance plan. "We’ll put in a plan that would mean that, if we get agreement this week, we could by next week start recalling people.
"This week will be the first time we have all the unions and labour representatives in one room. In my opinion, there will be a lot of posturing so it’s unlikely anything will happen this week."
If the facilitator reports that no headway has been made at the meetings, Harmony can start retrenching Kusasalethu’s workers.
The mine has 7-million ounces of gold ready to be extracted, and a further 9-million ounces in resources.
There was an unprotected strike at Kusasalethu throughout most of October, costing 25,000oz in lost production.
There was further labour unrest last month, culminating in an underground sit-in during which some workers were held hostage, Mr Briggs said.
Harmony then kept the mine shut after the year-end break and told its workers to remain at home on full pay until it had talked to the trade unions.
Production for the December quarter is forecast to be close to 13,000oz, down from 50,000oz in the previous three months.
Harmony has lowered its full-year forecast to 1.2-million ounces from 1.3-million ounces.
Investors have waited 12 years for a return on the R1bn used to buy Kusasalethu. The mine started making a profit in the March 2011 quarter, but this was brought to an abrupt halt by the labour action.
"Shareholders still haven’t got their payback.… It was just starting to turn the curve and start decreasing that outstanding amount," Mr Briggs said.
"The problem now is that it shows investors that you put R1bn into Harmony and 12 years later you don’t have your money back. It’s quite alarming when you look at it that way."
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