AngloGold gives striking South African miners ultimatum

Reuters News
Posted: Oct 22, 2012 10:25 AM
AngloGold gives striking South African miners ultimatum

By David Dolan and Sherilee Lakmidas

JOHANNESBURG (Reuters) - AngloGold Ashanti Ltd, the world's No.3 gold producer, has told striking South African miners to return to work or face dismissal, joining rivals taking an increasingly hard line against labor unrest that has choked off output.

South Africa is struggling to resolve violent unrest that has poisoned industrial relations and marred its image overseas. On Monday the commission investigating the killing of 34 miners by police on August 16 heard opening statements.

"It is regretful that matters have reached this stage, with job losses now being threatened and livelihoods for thousands of families being placed at risk," AngloGold Ashanti Chief Executive Mark Cutifani said in a statement.

The company said workers, who have been on a month-long illegal strike, must return to work by noon (1000 GMT) on Wednesday or face dismissal. Those who return on time will receive an improved wage offer, it added.

About 100,000 workers in South Africa, mostly in mining, have downed tools for better pay since August. The strikes have sparked credit downgrades of Africa's top economy and raised questions about the relatively slow response of President Jacob Zuma's government.

With the government now pressing miners to return to work, more companies are resorting to hard-ball negotiating tactics to end wildcat strikes. Some have been successful.

Miners at rival bullion producer Gold Fields ended a strike on Friday after they were threatened with dismissal.

Anglo American Platinum, the world's largest platinum producer, was the first to take a stand, sacking 12,000 workers at its Rustenburg operations earlier this month

The company's Rustenburg mines have been shut since Sept 12. It said on Thursday it would delay the dismissal process at Union and Amandelbult, where it employs 20,500 people. It also said it was open to discussing the reinstatement of the sacked workers with unions.


"There's been way too much rhetoric from government and mining companies," said Peter Major, mining analyst at consultancy Cadiz Corporate Solutions in Cape Town.

"These are the most illegal, violent and destructive strikes and the companies need to start carrying through on positive action."

About 24,000 miners are on strike across AngoGold's operations in South Africa, where it is the top bullion producer.

The company said each week of the strike cost it 32,000 ounces in lost production. It also warned a prolonged strike could cause it to shut down some of its operations.

The strikes spread into other mining industries after starting in the platinum mines. At Lonmin Plc's Marikana mine in Rustenburg police shot dead 34 miners in one day in August, the most violent police action in South Africa's post-apartheid history.

In Rustenburg, about 120 km (75 miles) northwest of Johannesburg, a government-appointed commission investigating the "Marikana massacre" heard opening statements from police, unions and Lonmin.

Many said the atmosphere of intimidation that led to violent strikes was still pervasive in the platinum belt.

The commission, led by a retired judge, and its findings could be politically damaging to Zuma and the ruling African National Congress, especially if the security forces are found to have been overzealous in their use of force.

But there have been signs of progress: diamond miner Petra Diamonds said on Monday that an illegal strike at its Cullinan mine in South Africa had ended following a meeting between unions and management.

(Additional reporting by Jon Herskovitz in Rustenburg; Editing by Mark Potter)