UPDATE 2-S.Africa strikes widen, stoke contagion fears

Fri Aug 31, 2012 9:53am EDT

Related Topics

* Says illegal strike at east section of KDC mine

* Two day, night shifts lost so far

* AMCU says not involved in strike

* Shares down 4 pct

By David Dolan and Ed Stoddard

JOHANNESBURG, Aug 31 (Reuters) - South African bullion miner Gold Fields said about a quarter of its 46,000 workers had been on a wildcat strike since Wednesday evening in the latest labour unrest to hit the mining industry of Africa's top economy.

The strike at the world's No.4 gold producer follows a deadly stand-off at platinum miner Lonmin Plc which is still not resolved after three weeks.

Gold Fields said in a statement on Friday that about 12,000 workers had been on an "unlawful and unprotected" strike at the east section of its KDC mine in South Africa.

"Based on informal feedback from employees, the strike appears to be related mainly to disagreements within organised labour and related structures on the mine, although we cannot confirm this," it said.

Gold Fields and South Africa's other big gold miners signed 2-year wage agreements last year which expire in mid-2013.

Frans Baleni, general secretary of the National Union of Mineworkers, told Reuters the strike was started by a disagreement over insurance benefits.

Gold Fields said it has so far lost two night and day shifts. Just west of Johannesburg, KDC is Gold Fields' largest operation in South Africa and produced 279,600 ounces in the April-June quarter.

"I think there is a good prospect for contagion," said Gary van Staden, a Johannesburg-based political scientist at NKC Independent Economists.

"There is a very good chance that we will see a spreading of wildcat action on the mines."

Gold Fields shares were down 4.0 percent at 99.80 rand as of 1349 GMT.

Clashes between police and workers this month left 44 people, mostly miners, dead and has brought production at Lonmin to a standstill.

South African prosecutors on Thursday charged 270 striking miners with murder of 34 co-workers seen being shot dead in a hail of police bullets captured in videos broadcast around the world.

Prosecution have filed papers invoking a measure called "common purpose" seldom used since the dying days of apartheid, arguing the miners were complicit in the killings since they were arrested at the scene with weapons.

South Africa's justice minister on Friday rebuked prosecutors for the move, saying the decision had caused "shock, panic and confusion" among the general public.

Mines minister Susan Shabangu acknowledged this week that the recent labour violence would impact potential investment into South Africa.

The Lonmin stand-off was sparked by a turf war between the established National Union of Mineworkers and a militant newcomer, the Association of Mineworkers and Construction Union (AMCU).

AMCU's president told a separate news conference on Friday that it had no members at Gold Fields and was not involved in the strike. ($1 = 8.4836 South African rand) (Editing by Jason Neely)

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