Strike starts to bite at South Deep

The strike at Gold Fields' South Deep mine was having a "material impact" on production, the gold producer said yesterday.

More than 3000 mineworkers at South Deep, southwest of Johannesburg near Vanderbijlpark, were taking part in the strike, which entered its third day yesterday.

At the heart of the dispute is the National Union of Mineworkers' demand to be involved in the appointment of senior managers and in procurement and tender processes.

Gold Fields maintains that these are the responsibility of management.

With the parties having reached a stalemate, NUM yesterday threatened to launch a sympathy strike and bring all of Gold Fields' South African operations to a halt, disrupting production.

It is projected that Gold Fields' four South African mining operations - South Deep, Driefontein Gold Mine, Kloof Gold Mine, and Beatrix Gold Mine - will produce up to 1.83 million ounces per year for the financial year 2011, according to the fourth-quarter results for 2010.

Currently, Gold Fields has attributable production of about 3.5 million ounces per year from nine operating mines in South Africa, Ghana, Australia and Peru.

Sven Lunsche, spokesman for Gold Fields, said the gold miner had not been given formal indication from the union that it planned a sympathy strike.

NUM warned that there was a "great possibility of sweeping strike action", across all of Gold Fields operations.

Lunsche said if NUM embarked on a sympathy strike at Gold Fields' other mines, the company would obviously take this into consideration.

He admitted the strike was having a material impact on South Deep production.

But he said the company was not ready to publicly quantify the production loss as yet.

The development of the South Deep mine was affected, but to a lesser extent than production, he said.

South Deep will ramp up to full production only from 2014 onwards.