AngloGold, the world’s third-largest gold producer, today said all of its South African mines have been stopped. Gold Fields lost a metric ton, or about 32,000 ounces, of output because of strikes at its KDC and Beatrix sites.
Gold-mine workers have been encouraged by the pay increase prompted by a wildcat strike in the platinum industry. A six- week walkout at Lonmin Plc (LMI)’s Marikana mine erupted into violence that killed 46, including 34 shot by police last month. Workers won wage gains of as much as 22 percent, more than four times the August inflation rate, before returning on Sept. 20. Coal of Africa Ltd. (CZA) employees and about 20,000 transport workers are also on strike.
“Workers are now demanding wage increases according to the ‘Lonmin settlement,’” David Davis, an SBG Securities Ltd. gold analyst, said in a note. “Strike action may well spread from other mines to Harmony’s mines and to other industries.” Harmony Gold Mining Co. said it’s so far unaffected.
Direct action over wage demands has spread as workers sidelined traditional representatives for negotiating with management, such as the National Union of Mineworkers, a backer of the governing political party. At Lonmin, workers appointed their own leaders. Julius Malema, a youth leader expelled by the ruling African National Congress, has called for disruption and state control at mine operations.
Gold companies may bring forward wage talks scheduled for next year, given “the urgency of the matter,” Vusi Mabena, a stakeholder-relations executive at the Chamber of Mines, said Sept. 21. The chamber negotiates pay on behalf of AngloGold, Gold Fields and Harmony, Africa’s largest gold producers.
AngloGold fell 5.1 percent to 283.29 rand by the close of trading in Johannesburg. Gold Fields, the world’s fourth-biggest producer, declined for a third day, losing 2.3 percent to 102.98 rand. Gold dropped 0.9 percent to $1,744.65 an ounce as of 4:22 p.m. in London.
AngloGold workers striking since Sept. 10 at the Kopanang mine were yesterday joined by staff at other operations, the Johannesburg-based company said today in a statement.
While the company received wage demands today from the strikers, it doesn’t intend to negotiate directly with them, Alan Fine, a spokesman, said by mobile phone. “Wages are not something that’s negotiated at company level, and won’t be.” South Africa accounts for about 32 percent of the company’s output of the precious metal.
While the company received wage demands today from the strikers, it doesn’t intend to negotiate directly with them, Alan Fine, a spokesman, said by mobile phone. “Wages are not something that’s negotiated at company level, and won’t be.” South Africa accounts for about 32 percent of the company’s output of the precious metal.
Gold Fields is concerned that threats of violence against staff reporting for shifts are rising, said Sven Lunsche, a spokesman. A strike that started Sept. 9 at KDC West spread to Beatrix yesterday. Workers downed tools at KDC East this month.
There isn’t any suggestion the Association of Mining and Construction Union, a rival to the NUM, is orchestrating the disruption at AngloGold’s facilities, Fine said. The strikes were “obviously coordinated, but as to exactly how it was done, a lot of that is in the realm of speculation,” he said.
Mining companies operating in South Africa have faced above-inflation increases in wage and electricity costs for each of the last three years at least. Power costs increased an average 26 percent last year and 25 percent in 2010. Mines are getting deeper and more difficult to operate as orebodies get depleted.
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