If AngloGold follows through on its
threat, it means more than 35,000 mining workers at several companies
have been dismissed for illegally striking in recent weeks. The mass
firings have prompted criticism from unions and the government, but so
far have not provoked a repeat of the violence that sparked national
labor unrest in South Africa in August. Nevertheless, the dispute is hurting output at a time when the mining industry is facing falling commodity prices and rising costs.
About half of the employees at AngloGold mines who have been on strike since last month resumed work ahead of a final deadline for the end of the walkout, but those who didn't now face dismissal, the company said. The company said it is still holding meetings with striking-worker representatives to try to avoid the dismissals. Approximately 35,000 people are employed across AngloGold Ashanti's South African operations.
Several major South African gold and platinum producers are struggling to end weeks of wildcat strikes that have halted thousands of ounces of gold and platinum production and caused billions of rand in lost revenue.
Another company, Gold Fields Ltd., GFI.JO +0.47% "effectively dismissed" Tuesday 8,500 workers at its KDC East mine who ignored an ultimatum to return to work. More than three quarters of Gold Fields South Africa capacity had been stopped by the strikes.
Mass firings at Anglo American Platinum AMS.JO +0.88% PLC mines on Oct. 5 caused some workers to block roads, set tires on fire and clash with police, but nothing has been repeated on the scale of violence at Lonmin LMI.LN +3.58% PLC's Marikana platinum mine. Thirty-four workers were killed at Marikana when police opened fire on a crowd of striking miners on Aug. 16.
South Africa was once the world's largest gold producer, but has in the past few years fallen to fifth place as output declined. Mines are getting deeper, harder and more expensive to mine. Even if all miners were to return to work, mining company executives have warned that some operations will remain closed because they are no longer commercially viable.
"Areas that were marginal in the first place will be given extra scrutiny," said AngloGold Chief Executive Mark Cutifani. The company won't restore operations in areas that won't make money in the short term, he said.
Even before the strikes, Gold Fields Chief Executive Nick Holland was conducting a review to "right size" its operations.
Anglo American Platinum Ltd. is due to complete a review before year-end of its South African mines, which it said may lead to some closures of the least profitable sites.
"Almost all of the gold mines on strike are mature," says SBG Securities analyst David Davis, which means the mines are old and the resources are depleting. "These mines were going to have to be restructured and downsized anyhow in the next 12 to 36 months," and the strikes have only accelerated that process, he said.
The strikes have also damaged South Africa's struggling economy, hammering the country's currency and prompting ratings firms Moody's Investors Service and Standard & Poor's Ratings Services to cut its debt rating. Mine dismissals also exacerbate the country's 25% unemployment rate.
Adding to South Africa's economic concerns, the country's inflation rate rose more than expected in September due to rising food and fuel prices, presenting a fresh challenge to officials seeking to jump-start the country's battered economy. Prices rose 5.5% on the year, official statistics showed Wednesday, up from an annual inflation rate of 5% in August.
Miners are demanding higher salaries and better living conditions, which many say have changed little since the end of apartheid almost two decades ago.
AngloGold spokesman Alan Fine said the company is still hopeful talks between the company and worker representatives could resolve the situation. Gold Fields said many of the fired employees at its mine have appealed the decision, a process that will run several days.
Alex Canan
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