Harmony to launch investigation as Kusasalethu returns to work

Peter Steenkamp, CEO, Harmony Gold

WORKERS at Harmony Gold’s West Rand gold mine Kusasalethu returned to surface last night rather than spend a second a night underground with the gold firm’s management saying it would investigate why employees thought they qualified for a bonus.

About 1,700 workers at the mine chose not to return to surface at the end of the morning shift on January 11. No formal demands were made at the time but Harmony said at 9pm last night that workers had demanded payment of a special bonus.

They had also asked for the removal of the general manager as well as an assurance that disciplinary action would not be pursued, the company said.

Shortly before midnight, workers returned to surface. Eighteen employees had already been evacuated to surface as a result of ill health with one suffering symptoms of severe fatigue and dehydration.

Marian van der Walt, spokeswoman for Harmony, said the company would launch an independent investigation to establish how communication with the employees had broken down.

The bonus in question is at the discretion of the CEO, Peter Steenkamp, and relates to certain production targets that, at present, could not be discussed as they were ‘price sensitive’, said Van der Walt.

Harmony is due to present its second quarter results of its 2017 financial year on February 2. In August, Harmony paid a R67m bonus to employees, equal to about 3,000 each.

In the first quarter of its financial year, Kusasalethu produced 36,041 ounces of gold compared to 29,386 oz in the previous June quarter. However, the December quarter (just passed) is often typified by absences owing to the holidays and year-end festive celebrations.

In the meantime, the general manager referred to in union grievances had been placed on special leave pending a possible disciplinary hearing linked to the company’s investigation.

“We will keep the unions close,” said Van der Walt. Workers at Kusasalethu are primarily represented by the Association of Mineworkers & Construction Union.

Kusasalethu was last year identified by Steenkamp as one of three mines where high grade mining could be accelerated, a decision that would reduce its life of mine to five from 24 years

Steenkamp said there was little chance of it making a profit whilst mining the lower grade areas, even in an improved gold market of the last 12 months. Kusasalethu employs about 4,500 people.

“We are looking at harvesting the mine in the next five years,” he said. “There is one proviso in that we are doing an optimisation study to push it [life of mine] out further. I don’t think we have the margins there and I don’t want to put more capital into Kusasalethu,” Steenkamp said.

The cut in the life of mine at Kusasalethu was largely the reason for a 35.7% decrease in Harmony’s mineral reserves at its underground South African mines falling to 9.7 million oz from 15 million oz as of end-June, 2015.