Gold Fields: KDC fire a mystery, arson not ruled out

Reuters News
Posted: Aug 23, 2012 9:14 AM
Gold Fields: KDC fire a mystery, arson not ruled out

By Ed Stoddard

JOHANNESBURG (Reuters) - Arson or illicit mining may have been responsible for a fire at a South African operation of world no. 4 gold producer Gold Fields that killed five workers in June, the company's chief executive said on Thursday.

"It's impossible to rule out anything," Nick Holland told Reuters.

"This was an old worked-out area and we have no current workers in there and haven't had people in there for years," Holland said.

"So fires don't start by themselves. You need activities. You need material movement. So it's a mystery to us," he said.

Mine owners say illegal mining is a major problem in resource-rich South Africa.

Gold Fields said it expected to lose about 50,000 ounces of production from the fire at the Ya Rona shaft at its KDC West operation because of disruption to working areas nearby.

In March, up to 20 men were killed after a rock fall at an abandoned gold mine near Johannesburg and at least 10 died in May when a tunnel collapsed at a disused diamond mine.

Other mining executives and sources have told Reuters the Ya Rona fire bore the hallmarks of arson or illegal mining.

Illegal miners sometimes light fires to cook which can cause larger blazes or trigger methane explosions. Arson sometimes stems from labor disputes or unrest.

Holland said the fire, which raged for weeks, was now out but investigators could not yet access the area safely.

"We are now flushing the mine out of all the gases. Once we can get in there safely we hopefully will learn more clues," he said.

He said the company was now sealing off all disused areas at its mining operations in South Africa.

(Reporting by Ed Stoddard; Editing by David Cowell)