Gold One International Ltd. (ASX: GDO) has issued notices of suspension to numerous employees currently on strike at Ezulwini in South Africa. The notices went out after the Labour Court issued an order against the strike, deeming it illegal.
Such strikes, primarily underway because workers have been demanding wages that are as much as four times inflation, have brought operations to a stop at mines owned by Africa’s three biggest gold companies as well as the world’s largest platinum producer. Moreover, deliveries of various goods including motor oil have been delayed, as truck drivers are part of the strike.
As of August, inflation was at 5 percent. Following a strike by Anglo American Platinum Ltd. (PINK: AGPPY), roughly 12 percent of the world’s platinum production ground to a halt.
Last month at Lonmin’s (LON: LMI) Marikana mine, almost 46 people died in protests. Workers ended an illegal strike that stretched over six weeks, after they won pay increases between 11 and 22 percent. Protests got violent, blocking mine entrances with burning tires; security was heightened at Amplat’s Khuseleka mine in response.
The strikes have been spreading across mines. AngloGold Ashanti’s (NYSE: AU) South African mines are down, as are Gold Fields Ltd.’s (NYSE: GFI) KDC West and Beatrix mines.
The gold mines account for 39 percent of the nation’s gold output. Prices have risen by 18 percent or so since the beginning of August, and platinum has risen around 0.8 percent to $1,701.49 per ounce in London.
The strikes have resulted in several long-term investors divesting South African gold stocks.
Bloomberg reports:
“The impact of the truck strike on the South African wholesale and retail industry is being felt,” the Consumer Goods Council of South Africa said in an e-mailed statement yesterday.
Workers are communicating directly with management through labor unions, and the Chamber of Mines, along with the National Union of Mineworkers, met on Wednesday and will convene again on October 9.
