Harmony takes hard line stance, threatens to close mine

Harmony Gold sent jitters across the country yesterday with threat to shut down its Kusasalethu mine in Carletonville which puts about 6000 jobs on the line. The development raises concerns that the mining industry has not shaken off the crisis which disturbed production last year and led to the Marikana massacre.

The move follows a wave of labour unrest at the mine during the quarter ended December. After delaying the post Christmas holidays opening of the mine Harmony announced yesterday that it will keep the mine closed and has kick started a process of placing the operation under care and maintenance.  The group will pursue negotiations with stakeholders which if successful will see it reverse the process of placing the operation under care and maintenance.

Harmony’s move may be pointing towards the hardening of attitudes in the mining industry which was visited by widespread wildcat strikes last year. These wildcat strikes brought a significant portion of the mining industry to a halt during the third quarter of last year putting the South African mining industry in jeopardy.

Certainly Harmony’s CEO Graham Briggs was not pulling punches during his presentation yesterday. He said the Kusasalethu mine was viable mine but needed to be managed and operated within the ambit of the law. He was quoted by Reuters saying “There is an extremely high risk something could go wrong at Kusasalethu in its current state. We are drawing a line in the sand”. He added that managers had received death threats and shots had been fired at police at the mine.

The Kusasalethu mine has been visited by union rivalry as the emerging Association of Mineworkers and Construction Union seems to have taken over the place of the National Union of Metalworkers. The unions are opposing the Harmony move saying the group has jumped the gun.

The Harmony statement said “It is management’s legal and moral obligation and duty to ensure the security, safety and health of all employees at Kusasalethu and to ensure that the mine’s standards and procedures as well as the provisions of the MHSA are imposed. These legal and moral obligations have been severely undermined to the point that it has become an impossible task given the unlawful and violent events during the December 2012 quarter. The unlawful actions and behaviours at Kusasalethu have led to situations that are unsafe,and are in direct contravention of the MHSA. The consequences of these actions and behaviours have resulted in an elevated level of risk to all the employees of Kusasalethu. It is management’s view that it has exhausted all options in attempting to ensure compliance with the provisions of the MHSA and in the current environment management cannot ensure the security, safety and health of Kusasalethu employees.

During the December 2012 quarter Kusasalethu experienced an unprotected strike, numerous other incidents of illegal industrial action, violence, sit-ins, vandalism of mine property and other labour disruptions. The on-going unlawful events caused management to give serious consideration to both the operational and financial position   of   the   mine   and   the   future   viability   of Kusasalethu.

Graham Briggs, chief executive officer of Harmony commented: “We wish to engage with all stakeholders in order to reach an agreement that will bind all employees of the mine and that will provide management with sufficient assurances that there will be a return to normal, safe operations and production at the Kusasalethu operations. We wish to seek a sustainable and lasting

solution that would ensure that the security, safety and health situation at the mine is normalised and compliant with all applicable laws and the policies and procedure of the mine.

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