Harmony Gold Mining Co. (ADR) (NYSE:HMY) has revealed that employees working at the Kusasalethu mine had started an unprotected strike aimed at protesting the fact that the AMCU-aligned branch leadership had been suspended. AMCU is the acronym for the Association of Mineworkers and Construction Union. The suspended branch leaders had been encouraging workers to engage in a go-slow which saw only 25% of employees show up for work on Wednesday. This resulted in production grinding to a halt on Thursday.
On Thursday evening, reports indicated that Harmony Gold had sought a meeting with the leadership of the Association of Mineworkers and Construction Union though this could not be authoritatively confirmed.
Illegal sit-in
The suspension of the branch leaders came after an illegal sit-in that lasted for two days earlier in the year. Consequently, disciplinary proceedings were conducted against employees numbering about 40. The sit-in had seen approximately 1,700 employees participate but it was later resolved. Some of the grievances that the employees had included production bonuses as well as shaft and mine management.
A spokesperson for Harmony Gold, Marian van der Walt disclosed that the mine and the Association of Mineworkers and Construction Union had all agreed that an independent investigation be conducted.
“Subsequently, it was found that it was 40 employees who instigated the strike action. Safety is our first priority. These employees were found to have held people underground against their will, which risked psychological and physical harm [to them],” said Van der Walt.
Further disciplinary action
Harmony Gold also added that more disciplinary action might be taken since the strike was unprotected and posed a threat to the viability of the mine. Peter Steenkamp, the chief executive officer of Harmony Gold, called on the workers to resume working and air their grievances in the appropriate manner.
Plunging into depths of more than three kilometers, the Kusasalethu mine is the deepest one in Harmony Gold’s portfolio. There are slightly more than 4,400 employees at the mine of which 3,944 are permanently employee with only a few being independent contractors.
On Thursday shares of Harmony Gold Mining Co. fell by 4.49% to close the day at $2.34.