Strike halts Kusasalethu mine
• Harmony Gold secures interdict against industrial action in protest against dismissal of Amcu branch leadership
Harmony Gold’s most troubled mine, Kusasalethu, is at a standstill after workers embarked on an unprotected strike at its second-largest gold source and violence erupted in nearby communities.
Harmony Gold’s most troubled mine, Kusasalethu, is at a standstill as workers embark on an unprotected strike at its secondlargest gold source and violence erupted in nearby communities.
Workers started an unprotected stoppage on Friday to protest against the company’s dismissal of the branch leadership of the Association of Mineworkers and Construction Union (Amcu), for its role in unprotected industrial action at the mine earlier in 2017.
“The dismissal of the branch leadership follows an extensive legal disciplinary process followed by [the] management,” Harmony CEO Peter Steenkamp said in a statement.
“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,” he said.
The mine has come under intense management focus to return it to profitability and, while still a large contributor of gold, it has now been grouped in the short-life group of assets to restore it to financial health, efforts that are undermined by the unsettled labour situation.
Harmony said that the strike continued during the weekend.
It prompted the company to seek and secure an urgent interdict against the strike from the Labour Court on Monday.
The notice would be served on employees, compelling them to return to work on the night shift, it said.
Amcu declined to comment, saying that it was in talks with the company.
The National Union of Mineworkers, Amcu’s rival in the platinum and gold sectors, alleged that four of its members’ houses and cars were set alight at the weekend as tensions at the mine spilt over into communities around Carletonville.
Kusasalethu, which has been plagued by labour stoppages and violence, was scaled back to mine just high-grade, newer areas of the mine, a decision that slashed the life of the mine to five years from more than 20 years, with unprofitable underground workings mothballed. Harmony cut the loss-making mine’s 6,000 workforce by 1,300 people. The mine had a six-day unprotected stoppage in April after an underground sit-in in January that disrupted production.
In the financial year to endJune 2017, the mine produced 141,270oz of gold compared to 124,198oz the year before.
The mine has also experienced safety problems, with five workers killed in an underground earth tremor in August.
In 2014, Harmony shut the mine for two weeks to remove more than 100 illegal miners from underground after a spate of fires. The shutdown cost it an estimated R112m in lost revenue. In November 2012, two people were shot and killed and another wounded at the mine as the two unions clashed.
WE APPEAL TO EMPLOYEES TO RETURN TO WORK AND STRONGLY CONDEMN ANY ACT OF VIOLENCE
There was an upbeat tone to Herman Kotze’s presentation of Net1’s quarterly results on Friday. Not that the results for the three months to end-September were particularly encouraging, but the relatively new CEO was excited about the group’s prospects.
Kotze was determined to persuade anyone listening in to the earnings call that Net1 is much more than Cash Paymaster Services’s (CPS’s) contract with the South African Social Security Agency (Sassa). It might help if he had been able to report progress appointing a chief financial officer, but six months after Net1 founder Serge Belamant left and Kotze slipped into his role, the chief financial officer position is vacant.
Not everybody, check Black Sash for one, will have been as excited as Kotze about Net1’s continued growth in its EasyPay Everywhere (EPE) offering and related services including ATMs and financial services such as SmartLife. The tie-up with Cell C is expected to drive further growth for EPE.
Although Belamant has expressed reservations about the multibillion-rand tie-up with Cell C (because of Net1’s lack of control) Kotze seems certain the two companies have made good progress towards “the realisation of anticipated synergies”.
But the biggest source of excitement for Kotze was Net1’s new international initiative, which revolves on plans to develop a global business based on the technology used by CPS in its Sassa contract.
“This business will focus exclusively on large-scale financial inclusion in emerging markets and economies globally.”
Its target market is the 2.5-billion people across the globe without a bank account.
No doubt this time, the International Finance Corporation will be watching closely to ensure there isn’t a repetition of the South African scandal.
Kusasalethu was one of Harmony’s long-life, important mines, but years of underperformance and problems with labour, safety and losses prompted a rethink that led to management opting for a focus on the high-grade parts of the operation and shortening its life dramatically.
Kusasalethu, near Carletonville, was planned to be a 20year mine, with a fresh mine developed under the old workings and gold extracted from both areas. But that plan has come to naught, partly because of unsettled labour conditions at the mine, with the life reduced to five years as mining focuses on the new areas.
The labour strife appears to be tied to the rise of the Association of Mineworkers and Construction Union (Amcu) at the mine from 2012, displacing the National Union of Mineworkers.
With about two-thirds of the workforce represented by Amcu, there have been mutterings that perhaps the leadership of the union at mine level wasn’t as strong or as disciplined as it could be, leading to a number of unprotected strikes and sit-ins, disrupting production at a time when the mine can least afford it. Constant stoppages curtail any potential future extension of life at the mine.
There is still gold in the old workings, which if costs were lowered and the gold price was higher, could be extracted.
Harmony could also make an investment decision to go deeper yet, but with the conditions at the mine, these options are drifting away, something the gold industry can ill afford when old mines are coming to the end of their lives and are being shut down across the board.
Graphic: RUBY-GAY MARTIN Source: BLOOMBERG STANDSTILL AT MINE
Graphic: DOROTHY KGOSI Source: IRESS