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In South Africa, approximately 100,000 workers, mostly miners, have been on strike for better pay since August. The strikes have led to credit downgrades of Africa’s top economy and marred the nation’s image overseas.
But the mining companies operating in that theater have not stepped down. On Monday, AngloGold Ashanti (NYSE:AU), the third largest gold producer in the world, issued an ultimatum to the illegally striking miners to return to work by Wednesday or be fired.
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The strikes have caused AngloGold to halt all mining in South Africa, which accounts for about a third of its total production. Since the strike began on September 25, nearly all of the 35,000-strong workforce have laid down their tools. According to Forbes, the strike has caused the company to lose roughly 30,000 ounces of gold weekly. Last year, the company produced 4.33 million ounces of gold from its 20 operations around the world.
A report by the Financial Times has indicated that while the company has made efforts to resolve the strike, “employees at the balance of the operations appeared to have rebuffed these efforts at resolution.”
“Meanwhile, conditions of the ore bodies and underground infrastructure across these ultra-deep operations have continued to deteriorate, raising the risk that portions of these mines will be sterilised and jobs permanently lost,” the company said to the Times. “The point has now been reached where further steps must be taken to try to break the deadlock and encourage a rapid return to normal operations.”
Strikes have affected other mining companies in South Africa as well. Anglo American Platinum (AGPPY.PK) and Gold Fields (NYSE:GFI) have taken similar measures to put down the strike, but with mixed results. After Gold Fields threatened dismissals, thousands of workers returned to the mines, however Anglo American dismissed 12,000 workers earlier this month.
American Platinum and Gold Fields have lost $20.4 billion and $22.2 billion respectively from the strife.
The strikes began initially in the platinum mines before spreading to other mining industries. The violence reached a pinnacle, when the Rustenburg police shot 34 miners to death at Lonmin’s (LNMIY.PK) Marikana mine on August 16. Reuters reported that a commission will hear opening statements regarding the killings on Monday, and its findings could be “politically damaging to Zuma and the ruling African National Congress, especially if the security forces are found to have been overzealous in their use of force.”
“It is regretful that matters have reached this stage, with job losses now being threatened and livelihoods for thousands of families being placed at risk,” said AngloGold Ashanti Chief Executive Mark Cutifani in a statement.
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