Harmony may shut S. Africa mine PDF Print E-mail
Tuesday, 08 January 2013 08:33

Harmony Gold may shut its Kusasalethu mine, where violent labour strife killed at least two workers last year and mine managers have received death threats, the South African firm announced Monday.

The company said it has launched processes "which may result in the closure of the mine and placement thereof on care and maintenance and possible retrenchments."

The announcement marks an uneasy start to the year for South Africa's key mining sector, which in 2012 went through a devastating and costly bout of labour unrest.

Last year's nationwide strikes left over 50 people dead, starting with violence in August at London-listed Lonmin's Marikana platinum mine, before spreading to other mines and sectors. The strikes drew in over 140,000 workers and cost more than $1.2 billion.

Harmony Gold chief executive Graham Briggs said in a conference call that currently "secure and safe production is just not possible" at the Kusasalethu mine in Carletonville, southwest of Johannesburg.

The mine, which employees some 6,000 workers, has not re-opened since it shut after the Christmas holiday break.

"There is extremely high risk that something will go wrong at Kusasalethu in its current state," said Briggs.

"We are drawing a line in the sand."

He said live ammunition had been fired at mine security guards during the December unrest, while mine managers had received death threats.

"Management is of the view that the status quo concerning production and labour strife will remain, as it has exhausted all possible avenues to achieve normal production and cannot find a solution to the current state of lawlessness prevailing," said the company in a statement.

"This is a difficult situation, it's quite sad for us to do this."

In the latest troubles to hit the mine, protesting gold miners clashed with police and private security guards last month. Ten workers were hurt by rubber bullets or tear gas as 1,700 others staged a 38-hour underground sit-in.

In November, two workers were killed and one wounded in a turf battle between members of rival unions at the same shaft.

Harmony has 10 underground and several surface operations in South Africa. It bought Kusasalethu in 2001. It also has operations in Papua New Guinea.

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