HARMONY Gold will keep its Kusasalethu mine, near Carletonville, closed while it considers whether to continue its operations there or begin retrenchments, the company said on Monday.
Kusasalethu has been plagued by violent clashes between the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu), which has applied for recognition by Harmony Gold, South Africa’s third-largest gold producer.
The mine’s 5,000 workers were sent home a day earlier than expected on December 21 after an underground sit-in by 1,700 workers, who demanded the reinstatement of about 580 workers suspended because of their participation in an illegal strike on October 25.
Harmony said on Monday that it had started a process under section 189 of the Labour Relations Act that may result in the closing of the mine and possible retrenchments.
"Management is of the view that the status quo concerning production and labour strife will remain," it said in a statement, "as it has exhausted all possible avenues to achieve normal production and cannot find a solution to the current state of lawlessness prevailing."
The miner said it had "legal and moral" obligations to secure the safety of employees at the mine. "These obligations have been severely undermined to the point that it has become an impossible task given the unlawful and violent events during the December 2012 quarter."
It said the closure and retrenchments would be avoided if a "lasting and sustainable" agreement was reached to end the labour unrest that plagued the mine in December.
"Should the aforesaid goal not be achieved by means of a consultation and discussion process, then the company will have no alternative but to continue and conclude the section 189 process," Harmony said.
The company generated R134m in profit from the Kusasalethu mine in the third quarter of 2012. However, due to the labour woes, the cash flow for the December quarter fell into the red for a R150m loss as the mine achieved only 22% of its planned gold production.
"Should the current poor performance continue, then the situation at Kusasalethu is dire for the rest of the 2013 financial year and into the future," the company said.
In December, more than 1,000 employees staged an underground sit-in at the mine demanding that the reinstatement of their fellow employees who had been suspended.
The Chamber of Mines has said it is keeping a close watch on developments at the Kusasalethu mine, as it fears that contagious worker unrest there could spread throughout the industry if it is not nipped in the bud.
The industry, which returns to work on Monday, is on tenterhooks, not knowing whether the wildcat strikes that plagued gold and platinum mines last year will continue into this year. Last week, NUM general secretary Frans Baleni was already picking up rumours of further strikes in the offing by workers who felt their wage expectations had not been met.
Members of the Chamber of Mines would meet early this week to share information and decide on a way forward, the chamber’s senior executive for employment relations, Elize Strydom, said on Friday. A meeting with unions might be considered to establish a modus operandi, especially in the light of coming wage negotiations.
A repetition of last year’s disturbances — which shaved 0.5 percentage points off South Africa’s projected growth in gross domestic product, knocked export earnings and caused severe jitters among foreign investors — would be very harmful for the country.
The two-year wage agreement for gold and coal mines comes up for negotiation in June.
With Sapa and Linda Ensor
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