JOHANNESBURG (Reuters) - South African bullion producer Gold Fields suspended output at its KDC operations on Monday after 8,500 workers joined wildcat strikes sweeping through the sector in Africa's biggest economy.
Gold Fields said around 19,500 of KDC's 26,700-strong workforce were now part of the strike. The operation, which includes the KDC West and East mines, produced 279,600 ounces of gold in the April-June quarter, roughly a third of group output.
"Production at the entire KDC has now been suspended," the company said in a statement.
Since August, 75,000 miners have downed tools in often illegal and violent walkouts that are hitting economic growth and investor confidence, and raising questions about President Jacob Zuma's leadership shortly before a leadership election in the ruling African National Congress (ANC).
More woes seemed in store for the gold sector after striking miners on Monday rejected the industry's latest pay rise offer after an extended deadline and refused to return to work.
The Chamber of Mines, which negotiates on behalf of Gold Fields, AngloGold Ashanti and Harmony Gold, said the companies would "explore other avenues to bring normality" to the industry but did not say what the options were.
However, Gideon du Plessis, deputy general secretary of the Solidarity trade union that is part of the talks, said the companies were considering closing loss-making mines, and laying-off workers at other operations.
The National Union of Mineworkers (NUM) reacted angrily to that prospect, saying any mass dismissals, as has happened in the troubled platinum sector, would be counterproductive.
"It would only serve to fuel emotions that are already high and inflame the situation further," NUM said in a statement.
The strike is already costing AngloGold 32,000 ounces of gold each week, while Harmony said it was losing between 20-25 kg of gold each day to a strike at its Kusasalethu mine. Gold Fields has lost 65,000 ounces to date.
MINE PARALYSIS
The death toll from two months of labour unrest has risen to more than 50. Fresh bouts of violence over the weekend led to the arrest of more than 70 miners at a Gold Fields mine and four others at an Anglo American Platinum operation.
The strikes have paralysed production at mines in South Africa, a top platinum, iron ore, gold and coal producer, and damaged South Africa's reputation among investors.
Standard & Poor's cut its credit rating one notch last Friday, saying mining strikes and social tensions could reduce fiscal flexibility and hurt growth.
Finance Minister Pravin Gordhan said the S&P decision came as a "surprise", especially since mining strikes were not yet having a major impact on government revenue and spending plans.
"There is no evidence that this will throw us off course," Gordhan said in an interview with Talk Radio 702.
S&P and Moody's, which downgraded South African bonds a notch in September, both cited a lack of political leadership in the current labour crisis, indicating the ANC is having trouble managing an increasingly complex economy.
Truck drivers signed a deal for hefty raises last week, ending a three-week strike that squeezed deliveries of fuel, cash and consumer goods, and which prompted central bank Deputy Governor Daniel Mminele to says growth forecasts of 2.6 percent for 2012 and 3.4 percent for 2013 will "need to be revisited".
Source: http://news.yahoo.com/africa-strikes-engulf-gold-fields-kdc-operations-154326286--sector.html
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