Strikers cleared from Kumba's Sishen mine in South Africa

Reuters News

10/16/2012 5:46:38 AM - Reuters News

By Sherilee Lakmidas

JOHANNESBURG (Reuters) - An illegal strike at Kumba Iron Ore's giant Sishen mine in South Africa ended on Tuesday after police arrested 40 miners in a pre-dawn raid, and the firm said production would resume as soon as possible.

Police recovered heavy mining equipment including giant trucks and bulldozers seized by the strikers, who had blockaded the pit for almost two weeks.

The strike cost Kumba, a unit of Anglo American and Africa's largest iron ore producer, 120,000 tonnes of lost production a day.

"Any damage to equipment is being assessed and the company has plans in place to restore the mine to full production as soon as possible," it said in a statement.

Kumba's shares were up 1.39 percent at 498.31 rand by 0935 GMT, compared with a 0.27 percent rise in the JSE Top-40 blue-chip index.

On Monday, Kumba fired all the strikers who refused to leave the mine and failed to attend disciplinary hearings, following other mining companies that have resorted to mass dismissals to deal with labor unrest sweeping through the sector.

Since August, more than 80,000 miners have downed tools in often violent walkouts that are hitting economic growth and investor confidence, and raising questions about President Jacob Zuma's leadership shortly before an internal election in the ruling African National Congress (ANC).

Anglo American Platinum, the world's top producer of the precious metal, has fired 12,000 strikers, and more dismissals are expected in the gold sector after workers rejected the industry's latest pay offer and refused to return to work.

Unions said mass dismissals would be counterproductive and inflame the situation further.

"We are giving the employers until October 27 to reinstate all workers who are dismissed informally," the COSATU union federation said. "If they fail to do that, the federation will be outlining its program of action to deal with the mining industry as whole."

COAL PROTESTS

The death toll from two months of labor unrest stands at more than 50, and the violence has hit South Africa's reputation among investors.

Standard & Poor's and Moody's have both lowered South Africa's credit rating, citing a lack of political leadership and rising pressure on the government to throw money at the social problems seeping out of the mines.

Mining companies in South Africa, a major producer of platinum, gold, iron ore, ferrochrome and coal, are already grappling with fast-rising costs and weak demand for their commodities due to global economic woes.

Bullion and uranium producer Gold One International said on Tuesday it was suspending operations for 30 days at its Ezulwini mine following the dismissal of 1,417 striking workers.

While the strike at Kumba and a three-week walkout by truck drivers have ended, the unrest could get worse before it gets better.

Around 190,000 government workers are planning a nationwide walkout later this week, which could escalate into a full-blown strike, the South African Municipal Workers' Union has said.

Protests have been reported at individual coal mines, although the companies say production has not yet been hit.

($1 = 8.8193 South African rand)

(Writing by Agnieszka Flak; Editing by Kevin Liffey)