Johannesburg - Strike contagion was unleashed on South
Africa’s gold industry last night following confirmation that workers had
downed tools at the remainder of AngloGold Ashanti’s South African mines.
The upshot is that combined with the illegal strike
activities at Gold Fields [JSE:GFI], nearly 40% of South Africa’s productive
gold capacity was down – a development that an analyst said was “catastrophic”
for the industry and was sure to catalyse downsizing in the industry.
On an annualised basis, some 2.36 million ounces of gold
production, which includes output at all of AngloGold Ashanti’s operations
(2011: 1.6m oz), is affected by strikes that the National Union of Mineworkers
(Num) appears powerless to influence. South Africa produced just over 6m oz of
gold in 2011, according to data supplied by Roger Baxter, head of economics and
strategy at the Chamber of Mines of SA.
“Any increase in wages that comes from these strikes could
catalyse downsizing of the South African industry,” said David Davis, an
analyst for SBG Securities. “I’m sure that Gold Fields will probably bring
forward its downsizing (of its South African mines). This is potentially
catastrophic,” he said.
AngloGold Ashanti [JSE:ANG] said last night that strike
action at its Mponeng mine had also been extended – as of the night shift, to
workers at West Wits and the balance of its Vaal River Regions' operations.
“This interruption to normal mining and processing
operations comes amid unprocedural disruptions elsewhere in South Africa’s gold
and platinum mining sectors,” the company said in a statement. Shares in
AngloGold Ashanti were down 1.9% in early morning trade on the JSE.
AngloGold said that its priority was to “maintain safety,
peace and stability at each site and to continue a constructive dialogue with
all employees, their representatives and other stakeholders”.
SBG Securities’ Davis said that while the gold companies
could request for interdicts that would enable them to threaten striking
workers with dismissal, it was virtually impossible to implement them without
police protection at the mines.
No formal demands had yet been issued, said AngloGold
Ashanti. “The company is following the necessary standard legal procedures in
order to have the latest work stoppage formally declared as unprotected,” it
said.
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