Production resumes after unexpected sit-in

SIBANYE Gold, South Africa’s biggest gold producer, expected production to resume at the Masakhane shaft, in the Driefontein Mine, near Carletonville by last night after 1 200 employees ended an overnight underground sit-in over the cause of death of a colleague.

South Africa’s labour unrest, particularly in the mining industry, has contributed to the negative investor sentiment.

The illegal sit-in was resolved yesterday morning after employees agreed to return to the surface following several ultimatums and threats of legal action. Around 170 of the 1 200 had come up by Tuesday night.

Sibanye spokesman James Wellsted said the employees would be subject to disciplinary action, which would include possible dismissals.

“This is an illegal strike, we have lost two days of production, and we cannot afford this kind of disruption. Not in this tough economic climate,” Wellsted said.

Report disputed

Gold producers are struggling with rapidly falling prices and subdued demand from China, the world’s biggest consumer of raw minerals.

Wellsted said employees had taken matters into their own hands after disputing the initial report by the firm’s pathologist on the death of their colleague. The initial report found that Mosioua Kanono, a rock drill operator at the shaft, had died of natural causes two weeks ago.

Employees demanded that the firm should classify Kanono’s death as an accident, because mine accidents had legal implications as part of a deal signed with organised labour, Sibanye said.

In the event of an employee dying in an underground accident, the employees and family members are entitled to financial benefits. “What we want is for the state pathologist to give a report on the cause of death. We cannot classify the death until we have the report,” said Wellsted.

Driefontein management engaged with the Association of Mineworkers and Construction Union (Amcu) branch leadership on Monday on the issue of benefits. It was agreed that certain benefits would be reviewed where there was no finality on the cause of death.

While the company waited for the state pathologist’s report it agreed to transport employees to the funeral, and give preferential employment for family members of the deceased.

Amcu

president,

Joseph Mathunjwa, said the workers were protesting Sibanye’s refusal to take responsibility for the death.

He said the workers’ demand was that deaths underground should be treated as accidents, but the company was disputing the issue.

“The mineworkers are saying that those workers died during working hours, so that death should be classified as a mine accident which is what the mine is disputing,” he said.

The news of the sit-in overshadowed news that Sibanye had agreed to a $350 million (R4.66 billion) debt facility with banks, including Bank of America and HSBC Holdings.

Sibanye would pay the London interbank offered rate plus 2 percentage points a year for the three-year facility, which allows the company to borrow the money should it need to, the Westonaria-based company said in a statement on Monday.

The money could be used for “working capital and general corporate purposes”, Sibanye said.

Sibanye’s profit fell 77 percent to $14.3m in the first six months of the year as prices for precious metals tumbled and output declined in the first quarter following a series of processing-plant stoppages.

The company has said it is looking to buy platinum mines from Anglo American Platinum. – With additional reporting by Reuters