Harmony strike at Kusasalethu over, sheds four production days

Kusasalethu mine

A STRIKE at Harmony Gold’s west Rand mine, Kusasalethu, was ended this afternoon, but the gold producer had lost between three to four days of full production.

“We started hearing rumours about interruptions on Monday so we haven’t had full production at the time for about four days,” said Mariaan van der Walt, spokeswoman for Harmony Gold. “This is unfortunate as it will have an impact on production.”

“But Kusasalethu did have a very good month in February,” Van der Walt added. “The striking workers won’t be paid [as it was an illegal strike] so we also save on the working cost side.” The mine produces about 13% of Harmony Gold’s total one million to 1.1 million ounces a year in production, and generates 10% of total cash flow.

Harmony said in a statement to the Johannesburg Stock Exchange that the strike was brought to an end following discussions between its senior management and the leadership of the Association of Mineworkers and Construction Union (AMCU), the union that called the strike.

“I am pleased that the matter has been resolved and that operations at Kusasalethu will return to normality,” said Peter Steenkamp, CEO of Harmony Gold in a statement. “Today the parties demonstrated that they are willing and able to put their differences aside in the best interests of our employees and their families,” he added.

Van der Walt said Harmony could not disclose the basis of the agreement, but that disciplinary proceedings against the 40 miners who engaged in an underground sit-in at Kusasalethu in January would proceed. The sit-in was to demand payment of a special bonus and the removal of a general manager at the mine.

At the time, Harmony said it would launch an independent investigation to establish how communication with the employees had broken down. The bonus in question was at the discretion of the CEO, Peter Steenkamp and related to production targets.

Objecting to the disciplinary proceedings against the 40 miners, AMCU called a go-slow earlier this week, observed by about three-quarters of the workforce. Harmony responded by suspending AMCU branch leadership which then led to the strike.

Harmony said that the strike “… undermines the continued viability of the mine”. In August, the gold producer cut the life of Kusasalethu to five years from about 24 years after deciding to target high grade areas of the mine in terms of a harvesting strategy.