Two of South Africa’s main gold miners, AngloGold Ashanti (NYSE:AU) (JSE:ANG) (ASX: AGG) and Gold Fields (NYSE: GFI) are asking unions to help rebuild relations in the industry. They added that hostility between workers and management can only damage the long-term viability of the country’s gold mines and projects.
AngloGold Ashanti’s new CEO, Srinivasan Venkatakrishnan, said yesterday as part of the company’s second quarter results webcast, that the “circle of trust” had been broken between unions and employers. He added this development might affect the companies’ decisions to invest in technology that can prolong the life of South Africa’s gold-bearing ore bodies.
“What we see is if we don’t protect the ore bodies, they will decline. This is where the technology comes in, but it has got to be accompanied by a rebuilding of trust,” Venkatakrishnan said. “The circle of trust between stakeholders has broken and we are now in a blame game,” he added.
Meanwhile, Gold Fields’ leader Nick Holland told Miningmx relationships between workers and the local mining industry have been severely affected by “excessive finger-pointing.”
“The industry accepts it has made mistakes in the past and it recognises it has to do things differently. But we’re all in this together. Let us chase the same gold,” he was quoted as saying.
A decade ago, when gold prices were below $300 an ounce, most companies were at ease. Currently, even is bullion prices fall below $1,300 an ounce, as it has happened twice this week, a few companies claim they are already operating at a loss.
South Africa’s two main mining sectors, platinum and gold, are under pressure from spiralling costs and weaker commodity prices. Their representatives have warned than any significant increase in wages will risk more job losses and trigger closures.
The ongoing mining wage negotiations have been considered one of the most difficult in years and are expected to run until the end of the year.
The dispute in the gold sector is now in hands of he Commission for Conciliation, Mediation and Arbitration (CCMA) for mediation.