Update on NUM strike action at South Deep mine
Gold Fields Limited (Gold Fields) (JSE, NYSE: GFI) can confirm that production at its South Deep mine has been stopped as a result of strike action by the National Union of Mineworkers (NUM), which started on Friday afternoon (2 November 2018). Only limited essential services teams are working at the mine.
With the commencement of the strike a small group of around 150 - 200 NUM members blockaded entrances to South Deep, where they prevented employees reporting for work. There have been extensive reports of intimidation of employees, and also incidents of damage to property. The group have also blocked access to national roads.As a direct result of the NUM’s actions, the company applied for and obtained a court interdict yesterday (3 November 2018) against the violent and unlawful actions and damage to property by branch members. This was served on the NUM branch leadership this morning.
In view of the intimidation and violence, and to ensure the safety of employees who want to work, South Deep has temporarily advised all non-striking employees not to come to work. It means that production will be stopped until the situation has normalised and it is safe for our people to return to work.The company has appealed to the NUM and employees to behave in a responsible manner, in line with the law and the agreement in place between the company and the union in respect of the provision of essential services at the mine.
It has also appealed to the union to respect the rights of employees who choose to work, and to publicly commit to ensuring that it will not incite or condone violence or intimidation.
The industrial action follows extensive consultations by the company with the NUM and other stakeholders as part of a wide-ranging restructuring to stem South Deep’s significant cash losses. Most recently, the company undertook more than two months of consultations with the mine’s two registered trade unions, the NUM and UASA, under Section 189 of the Labour Relations Act, during
which various options were explored to improve the operational performance of the mine and limit job losses.
Last week South Deep sent retrenchment letters to approximately 1,100 employees, around 30% of the mine’s workforce. In addition, the mine has reduced the number of contractors by approximately 420 people.Gold Fields is concerned that the NUM branch has misled employees about the potential outcomes of a strike. The current retrenchment process is being undertaken in line with legislation and collective agreements. South Deep is not in a position to reverse the decision.
Before the strike, the mine was losing - on average - R3 million per day. For every day where there is no production, the losses could worsen, further imperiling the mine’s operation and leading to even more job losses. As the principle of no work, no pay applies, employees will also lose a significant amount of money for every day the strike continues, both in terms of direct pay and in terms of benefits.
Further, the NUM has accused Gold Fields of ‘aggression’, and suggested that the presence of security on mine premises was a ‘provocation’. Nothing could be further from the truth. The company’s primary responsibility is the safety and wellbeing of all employees, and the protection of its assets. The NUM branch leadership has from the outset of consultations threatened to bring the mine to a standstill.
Gold Fields CEO Nick Holland said: “The retrenchments are essential to reduce the risk of continuing operating losses and consolidate the current mining operations as a first step to building a sustainable mine. We are very concerned about the further impact that industrial action will have on the mine - and on our employees, with potentially more job losses.”“We respect the laws that allow for a peaceful, legal strike, but we cannot accept that non-striking workers are intimidated from coming to work. We had no choice but to seek a court injunction as the NUM branch leadership refused to provide us with guarantees that they would respect the rights of non-striking workers,” Holland said.
Gold Fields will announce South Deep’s latest production performance as part of the Group’s Q3 2018 operational update to be released on 9 November 2018.
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