Gold Fields keen to swiftly end Tarkwa strike

[miningmx.com] – MINERS at Gold Fields’ Tarkwa and Damang mines in Ghana have embarked on an illegal strike after serving notice of their dissatisfaction with the way profit share payments were calculated, among other grievances.

The development is a bitter irony for Gold Fields which earlier this year finalised the unbundling of its mature South African mines – operations that were mired in labour strife during the final few months of Gold Fields’ management.

It is thought that the unbundling was ultimately a response to the wishes of Gold Fields’ international shareholders who had been discouraged by the lack of productivity improvements at the South African mines.

Given the increased emphasis on Tarkwa and Damang in the new look Gold Fields, the group can’t afford an extended stand-off with employees, especially in this its first year as a slimmed down, leaner operator.

The Ghana Mineworkers Union (GMU) had earlier issued Gold Fields’ management with a 24-hour ultimatum to submit to its demands – which also included the unconditional reinstatement of a dismissed employee – or it would take its members, and those of its affiliates, on strike.

The illegal strike is also a response to worker dissatisfaction with “certain management structures”, the removal of certain members of senior management, concerns about catering delivery models and, worryingly, allegations of discrimination between expatriate and Ghanaian employees.

Gold Fields said it was analysing the demands “as a matter of urgency” and appealed for calm at the mines.

In 2012, Gold Fields lost an estimated R2.1bn in revenue owing to strike action at its South African mines KDC and Beatrix, equal to about 145,000 ounces of gold. Strike action affected the mines for about 108 days the majority of which fell in the December quarter. The strikes were typified by violence and intimidation with Gold Fields management taking a hard-line stance against protestors.

“The company holds the view that the industrial action is illegal and unprotected,” said Gold Fields of the strike at the Ghanian mines. This could expose participating workers to the no-work, no-pay rule as well as possible dismissal,” it said.

Damang and Tarkwa in particular are important constituents in the new Gold Fields now that the volume provided by KDC and Beatrix have been removed from the production pie.

In the last financial year, Tarkwa produced an attributable 647,000 ounces of gold for Gold Fields, equal to some 15% to 20% of total production. Perhaps more importantly, Tarkwa has the second lowest cash cost after Cerro Corona at some $673/oz and is the highest margin producer: 37% NCE.