Harmony Gold’s Kusasalethu hit by third strike of the year

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Kusasalethu mine

PRODUCTION at Harmony Gold’s West Rand mine Kusasalethu has been interrupted again – for the third time this year – after workers embarked on an illegal strike. The action comes amid intimidation of workers as well as outbreaks of violence in the vicinity of nearby Carletonville involving members of the Association of Mineworkers & Construction Union (AMCU) and the National Union of Mineworkers (NUM).

About 1,700 people staged an illegal sit-in at Kusasalethu during January following a decision by management not to pay a bonus to employees. The company began disciplinary proceedings involving 40 miners who had participated in the sit-in. Then in March, another strike erupted at the mine. It dragged on for 10 days resulting in the loss of 53,000 ounces of gold. In August, three miners were killed in underground accidents at Kusasalethu.

Kusasalethu has been a troublesome asset for Harmony over the years. In 2016, Harmony Gold CEO, Peter Steenkamp, said he would high grade the mine, a step that would result in its life of mine diminishing to five years from 24 years. The thinking was that the mine may yield fewer ounces but those produced would be profitable.

Steenkamp said earlier this year that strike activity would hurt the viability of the mine. Once deemed illegal, however – Harmony has today sought an interdict against the strike from the Labour Court – workers would not be paid, said Lauren Fourie, a spokesperson for Harmony. The rand gold price had also gained 15% in the last six months to R596,581.08/kg. This would improve the mine’s ability to withstand a prolonged strike.

Of the South African underground mines, only Bambanani and Kusasalethu produced less gold quarter-on-quarter in Harmony’s first quarter, reported earlier this month. Kusasalethu also lost cash although broadly, Harmony had a good production quarter.

Harmony Gold said employees at the mine did not report for work on Sunday evening following an ultimatum to return to work. The strike was in response to the dismissal of the AMCU’s branch leadership. “The dismissal of the branch leadership follows an extensive legal disciplinary process followed by management. Management continues to engage with the leadership of AMCU to address the current illegal industrial action,” Harmony said.

“We appeal to employees to return to work and strongly condemn any act of violence or intimidation. It is important that discipline at the mine be restored to ensure the sustainability of the mine,” said Steenkamp. 4,500 workers are employed at the mine.

The environment in the vicinity of Kusasalethu has become violent, according to the NUM which said four of its members working at the mine had their houses and cars set alight. “This happened following the dismissal of AMCU leaders by the company on matters related to misconduct,” said the NUM in a statement today.

“The AMCU members supporting their leadership went around on the 9 November 2017 in the evening stopping workers from reporting for duty. This happened again in the morning of the 10 November 2017. This led to our members losing their shifts due to intimidation by AMCU members who some of them are on suspension due to ill-discipline,” said Mbuyiseli Hibana, Carletonville Regional Secretary for the NUM.

1 COMMENT

  1. Peter Steenkamp, as we requested before, please close this cash drain and fire all these criminals ¨working¨there…
    This is just not worth it, they do not deserve jobs

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