UPDATE: South African Strike Spreads at Gold Fields

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By Devon Maylie

JOHANNESBURG-Gold Fields Ltd. (GFI) Monday said the illegal strike at its KDC gold mine has spread to the west section, pulling 15,000 workers away from production in another sign of unrest that has upended South Africa's mining sector.

Meanwhile, Lonmin PLC (LMI.LN) failed Monday to lure back workers to its platinum mine, as a wildcat strike continued to simmer at the site of August's deadly clash with police.

In the latest standoff, miners at Gold Fields followed co-workers from the east side last week and walked off the job, the company said. It added that about 400 workers at KDC west went around the mine Sunday to intimidate workers and demand they stay away and join their strike.

An internal union dispute prompted last week's strike on the east side of the mine, located outside Johannesburg in the northeast of the country. The dispute was later resolved and production resumed on Thursday.

Gold Fields said it received a list of demands from those who went on strike Monday, including a demand for 12,500 rand ($1,488), the same amount strikers at Lonmin are asking for, and new union leadership. The strike suspended all output at the KDC west section, which produces about 1,440 troy ounces of gold a day. Gold Fields said it would now meet with the workers to engage on the demands, which were presented to the company after a group of 400 workers marched to the local office.

South Africa's mining sector is reeling from a series of strikes over the past month that have resulted in 44 deaths at Lonmin alone and has hit production of metals such as gold and platinum. The unrest has also exposed deep rifts in the country's labor movement, threatening a contagion of work stoppages and undermining mine production in South Africa-the lifeblood of the country's economy.

The disruptions come as new unions recruit for members and worker frustrations are fanned by political groups.

Police said Monday about 3,500 protesters marched between different parts of Lonmin mine, singing songs and carrying sticks and machetes.

The strikes started Aug. 10, when 3,000 rock drillers downed tools at Lonmin's Marikana mine. Workers clashed in the following days, resulting in 10 deaths, before police fired live ammunition into a crowd of the protesters on Aug. 16, killing another 34 people.

Strikes have also been held at Anglo American Platinum Ltd.'s (AMS.JO) Thembelani mine, when several hundred workers refused to go underground in mid-August, while operations at a Royal Bafokeng Platinum Ltd. (RBP.JO) mine were halted briefly at the same time. Impala Platinum Holdings Ltd. (IMP.JO) said it too has received a renewed wage demand for another 10% increase from its workers last week following a similar strike that shut its largest mine for six weeks in February. The strike action spread into the gold sector with the events at Gold Fields and a clash with fired workers and security guards outside Gold One International Ltd.'s (GDO.AU) mine earlier this month, which left four in the hospital from rubber bullet wounds.

At the heart of many of the strikes are worker grievances around pay and the slow pace of change at the mines since the end of apartheid. Taking advantage of those sentiments, an emerging union called the Association of Mineworkers and Construction Union has been actively recruiting at the mines with promises to get workers higher pay. That has sparked clashes and internal disputes at the country's largest mine union, the National Union of Mineworkers, an ally of the country's ruling African National Congress.

Expelled ANC youth league leader Julius Malema has also taken advantage of the unrest, visiting mines such as Lonmin and Gold Fields, calling for workers to make the country's mining industry "ungovernable" as well as for South African President Jacob Zuma to resign.

Gold Fields said during the strike at the east section of KDC last week that workers told mine management they wanted new NUM leaders. Many of the workers on strike at Lonmin have echoed the same sentiments-saying that they think NUM has lost touch with the workers, is too close to mine management and too cozy with ANC leaders who now have business interests in the country's mines.

Lonmin has struggled to get workers back at the mine. A government-backed attempt to broker a peace accord between mine management, unions and worker groups has floundered.

Lonmin and all the parties were set to meet Monday to start wage negotiations. Workers are demanding a salary of 12,500 rand ($1,500) a month, almost triple what many say they make now after taxes. But Lonmin said the worker representatives failed to show for the meeting so it could be delayed another day, adding more pressure on Lonmin's finances. The strike has so far cost Lonmin 50,000 troy ounces of lost platinum production and analysts estimate about $100 million in revenue as a result.

Solidarity, a smaller union represented at Lonmin, said the worker representatives told the meeting through local church leaders that they were too tired to attend and would only return to work when they wage demand was met.

Write to Devon Maylie at [e-mail]