Illegal Amcu strike hits Harmony shares

HARMONY Gold slumped nearly 5 percent on the JSE yesterday as the company reported that production at its Kusasalethu mine had ground to halt after members of the Association of Mineworkers and Construction Union (Amcu) embarked on an illegal strike.

The company shares fell 4.18 percent to R29.32. Worldwide gold stocks retreated 0.2 percent to $1 246.81 (R15 524.53) after a six-day advance that totalled 4.2 percent.

The strike comes just weeks after workers at the mine staged an underground sit-in in January to demand the payment of a special bonus and the removal of the general manager.

Last year, Harmony Gold cut Kusasalethu’s lifespan to five years from about 24 years, following a harvesting strategy that targeted high-grade areas at the mine.

The company said Amcu members at the mine, which is near Carletonville, had gone on strike on Wednesday after the suspension of the union’s branch leadership.

It said only 25 percent of its workforce had reported for duty. Harmony chief executive Peter Steenkamp appealed to the union to engage with mine management in order to resolve the dispute.

“We appeal to the Amcu leadership to be responsible in its actions, to publicly condemn any form of intimidation and to act against members engaging in intimidation and to engage with management through the processes and procedures in place to deal with workplace disputes,” said Steenkamp.

Attempts to get a response from Amcu were not successful and the union failed to respond to the questions sent to it.

In the half-year results to end December, Kusasalethu saw its gold production rise 16 percent to 9 871 ounce mainly due to a 13 percent surge in tons milled, supported by a 3 percent increase in the recovered grade to 6.75g per metric ton.

Harmony’s overall gold production was up 8 percent to 17 227kg, or 553 862 ounces, for the period. Steenkamp said mine managers have sought an urgent meeting with the Amcu leadership to address the illegal industrial action.