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Harmony, labour work to end crisis

Jan 20 2013 11:09 City Press, Andre Janse van Vuuren

Company Data

HARMONY GOLD MINING COMPANY LIMITED [JSE:HAR]

Last traded 0
Change -0,45
% Change 0
Cumulative volume 1279223
Market cap 8.88bn

Last Updated: 19-12-2014 at 04:41. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - A resolution to safeguard the livelihood of 6 200 workers and the future of a potentially lucrative mine seems likely following talks between Harmony Gold Mining Company [JSE:HAR] and labour unions to end a standoff over violence that has threatened the viability of the group’s Kusasalethu mine.

Kusasalethu, situated on the West Rand near Carletonville, is one of Harmony’s flagship assets and could still be mined profitably for another 25 years.

It has, however, been standing idle since Christmas following several acts of violence that took place in November and December, subsequent to the resolution of last year’s industry-wide strikes.

These incidents included the murder of two Harmony workers, five illegal sit-ins during which non-participating employees were forced to remain underground, the assault of a mine manager, attempts to burn down offices as well as the making of death threats against mine managers.

The mine has not reopened after the traditional Christmas break as Harmony told employees to stay at home, pending the outcome of a Section 189 process and consultations with unions. The mine employs 5 193 workers and another 990 contractors.

“We are drawing a line in the sand and are saying things cannot continue as they are,” Harmony chief executive Graham Briggs said last week when the company announced its intention to close the mine indefinitely should a resolution not be found.

“Secure and safe production is just not possible. There is an extremely high risk something will go wrong at the mine if things carry on the way they are.”

The related work interruptions have caused Harmony to only achieve about 22% of its planned production during December while suffering R252m in cash flow losses. Harmony acquired the mine, which previously was known as Elandsrand, for R1bn from AngloGold in 2001. The mine had a limited lifespan at the time, but Harmony invested capital over a period of 12 years to extend the asset’s viability until 2028. Kusasalethu only became cash flow positive in 2011.

“Kusasalethu is a mine that is worth saving,” said Briggs in a series of press adverts last week.

“We need to find a solution to continue mining this great asset.”

Following a meeting that took place under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA) on Thursday, the company and unions were optimistic a resolution was possible.

Harmony spokesperson Henrika Basterfield said the talks were “definitely constructive”, a view echoed by Lesiba Seshoka from the National Union of Mineworkers (NUM) who said all unions committed themselves to non-violence.

“The main issue is about violence and disruptions” Seshoka said. “Once the violence stops we can all go back to work.”

The NUM is the official majority union at Kusasalethu. However, the Association of Mineworkers and Construction Union (Amcu) has, since last year’s strike, made inroads at the mine and now claims to represent 62% of the mine’s workforce – a figure that is the current subject of a verifying process.

Briggs earlier pointed to Amcu’s emergence as the catalyst for the violence: “Pre-September last year, we had good representation from the NUM at Kusasalethu and we were making good progress with the mine and taking it forward. Employees were benefiting from their salaries and their bonuses and also a profit share in Harmony. In September that came to an end when we had the Amcu presentation. If you follow that sequence of events you have to put the ball in their court.”

The company has set 10 conditions to which unions had to commit for production to recommence, which included commitments to conform to the disciplinary code of the mine, holding no more illegal sit-ins or marches as well as “running the mine in a manner which would enable it to reach its projected profits”.

Amcu national treasurer Jimmy Gama said prior to Thursday’s meeting the union had no problem to commit to the conditions.

“Once that has been addressed and signed workers will come back, whereafter we can address other issues,” said Gama.

He, however, said he didn’t agree with the view that violence was the cause of the mine’s shutdown.

“The situation was manageable but workers were aggrieved,” said Gama, explaining Harmony didn’t immediately implement the agreed wage settlement to resolve last year’s strike. In response, Basterfield said the agreement was implemented end-December, backdated to November 15.

Amcu’s representative at Thursday’s CCMA meeting, general secretary Jeff Mphahlele, said the union had committed to peace proposals during the talks.

“There is no problem from our side,” he said.

A follow-up meeting is scheduled for 29 January.
 

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harmony gold mining company  |  amcu  |  num
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