About 6,200 striking miners at Gold Fields Ltd. returned to work on Wednesday for the first time in three weeks, but the majority of the company’s employees in South Africa remained on strike a day after it issued an ultimatum threatening mass dismissals.
Gold Fields, the world’s fourth largest producer, which relies on South Africa for about half its production, said miners have returned to work at three shafts at its Beatrix mine, enabling those operations to resume. But 23,000 employees in its total South African work force of 36,000 continue to strike after the company set a deadline for them to return work on Thursday or be fired.
It issued the warning after talks between the Chamber of Mines and unions ended in failure when many workers rejected wage increase proposals from Gold Fields, Harmony Gold Mining Co. Ltd. and AngloGold Ashanti Ltd., the world’s third biggest gold producer, which has been forced to halt its entire South Africa operations by the wildcat strikes across the industry.
Nick Holland, Gold Fields chief executive, said on Tuesday that the illegal strikes had cost it 65,000 ounces of gold production and R1.2bn ($140-million U.S.) in lost revenue, while AngloGold has said the industrial action is costing it about 32,000 gold ounces in lost production a week.
Gold companies have said they will not break existing wage agreements to meet miners’ demands, and Gold Fields’ decision to deliver an ultimatum follows Anglo American Platinum’s decision to dismiss 12,000 illegally striking workers at its Rustenburg operations on Oct. 5.
Other smaller companies have taken similar action, but it is a high-risk move in a volatile environment with the industrial action marred by violence and intimidation.
On Wednesday, Jacob Zuma, the president, called on the workers to return to their jobs and called for an end to the violence.
“These have no role in our system and simply have a negative effect,” he said. “The industrial relations environment in the mining sector must be normalized as a matter of priority.”
Although there have been previous incidents of companies firing strikers and rehiring them, it involved isolated disputes and has not happened on such a scale.
Amplat said on Friday that worker attendance at its operations in Rustenburg remained below 20 per cent, adding that most of its mining and processing operations in the north of Rustenburg have insufficient staff to operate safely.
AngloGold said it was continuing to talk to its employees about the wage proposals the gold companies made through the Chamber of Mines in the hope of resolving the strikes at its operations.
Violence and intimidation against workers continues to cause problems. AngloGold said workers at one of its mines were returning to work but were prevented from doing so when their buses were stoned.
Standard & Poor’s has revised its outlook for Anglo American to negative from stable, citing the group’s exposure to South Africa, from where it generates more than half its earnings before interest, tax, depreciation and amortization, the rating agency said.
S&P downgraded South Africa’s sovereign rating last week, after a similar move by Moody’s last month.