Bloomberg News

Harmony Kusasalethu Mine Works Night Shift After Two Killed

November 23, 2012

Employees at Harmony Gold Mining Company Ltd. (HAR)’s Kusasalethu mine worked the night shift yesterday after two people were killed and one injured in a fight between competing labor unions.

“The mine is operating as normal,” Marian van der Walt, a spokeswoman for the Johannesburg-based company, said by phone today. “The incident is a big disappointment to us.”

Fighting started with National Union of Mineworkers members after the Association of Mining and Construction Union moved its meeting into the mine’s hostel when it started raining, Van der Walt said. No company property was damaged, she said.

About 46 workers, police officials and security personnel have been killed in labor unrest that swept through South African platinum, gold, chrome and iron-ore operations starting Aug. 10, the deadliest mine violence since apartheid ended in 1994. Finance Minister Pravin Gordhan said stoppages have cost more than 10 billion rand ($1.1 billion) in lost output and will probably shave about 0.5 percentage point off growth.

AMCU has applied for recognition at Kusasalethu, situated southwest of Johannesburg, and the company is busy verifying the number of members, Van der Walt said. The labor union has challenged the dominance of NUM in the platinum industry.

The Chamber of Mines expects union rivalry to result in violence for some time yet and pay talks in the gold, coal and platinum industries to be disrupted next year, according to Bheki Sibiya, the industry body’s chief executive officer.

“The fight between the NUM and AMCU is extremely serious,” Sibiya told the Cape Town Press Club today. “We are going to struggle to get the NUM and AMCU to partner. We are going to have to cajole them to negotiate. We may see industrial action.”

The chamber anticipates that mining companies will be forced to cut their workforces as a result of high pay increases they awarded to end the strikes.

“The mining industry is going to restructure, there are going to be retrenchments because the levels of wages are high, not in absolute terms, but relative to productivity,’ Sibiya said. “I can’t tell you the numbers, but I can tell you it’s probably in the thousands, possibly going above 10,000, maybe higher.”

To contact the reporters on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net; Mike Cohen in Cape Town at mcohen21@bloomberg.net;

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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