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Anglo American plc (LSE:AAL) has regained control of its Sishen iron ore mine in South Africa, ending a two-week coup d’etat of what was left of a handful of employees who seized the mine on 3rd October 2012, as a show of force to extract increase in pay resulting in another series of lost production in the badly hurt mining sector of the country.
Kumba Iron Ore Limited, a listed company on the Johannesburg Stock Exchange and a subsidiary of Anglo American with a 65.2% interest, said it has regained possession of its heavy equipment two weeks after some 300 workers seized and threatened to destroy about 88 haul trucks and 13 bulldozers and other equipment worth 3.3 billion South African Rand should their demands were not met.
We Want More Pay
The workers who embarked on a strike declared illegal by a South African court demanded for an increase of R15,000 for all Kumba employees, on top of the current pay package and blocked the access to the mining pit on the 4th of October to send their message.
According to Kumba, the company had been losing 120,000 tonnes a day of finished product due to the industrial action and said that the lost production will affect the employees share scheme.
Permanent Kumba employees who signed up for the employee share scheme Envision, receives dividends twice a year, the amount of which is linked to the company’s performance, according to Kumba’s Chief Executive, Norman Mbazima.
No More Wage Increase Beyond CBA
Mr. Mbazima has stated in the past the company will not give in to the striking employees’ demands as a two-year collective bargaining agreement was signed two months ago providing for an increase of between 9% and 12% in the wages of the company’s 12,700 employees.
The South African Police Service (SAPS), acting on a court order issued yesterday, removed the remaining 120 strikers earlier today, while all those who participated and did not attend the disciplinary hearings held on Monday, 15th October, were dismissed.
“Criminal charges of extortion, intimidation, theft, trespassing, malicious damage to property and contempt of court have been laid,” Kumba said in a statement.
Resumption of Operations
Kumba is currently assessing the conditions of its equipment to ensure resumption of operations as soon as possible as the company only has until the middle of October (right about now) of stockpiles from the Sishen mine and other mines in the Northern Cape.
Sishen mine, one of the seven largest open pit mines in the world, produced 38.9 million tonnes of the steelmaking ingredient in 2011, contributing a big chunk of the 85% Kumba contributes to the total iron business of Anglo American.
Anglo American has recently declared it lost R700 million in revenue following an illegal strike at its platinum business also in South Africa, ending in the dismissal of about 12,000 workers.
South Africa’s mining sector has been facing labour unrest since the start of the year, with the most violent incidents led to the death of 46 employees during the six-week strike at Lonmin plc’s (LSE:LMI) Rustenburg mines.
Shares of the global mining giant inched 0.5% to £17.98 by 1:30 PM GMT, following the news.
