Police remove strikers from Kumba's South Africa Sishen mine

JOHANNESBURG Tue Oct 16, 2012 12:02pm EDT

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JOHANNESBURG (Reuters) - An illegal strike at Kumba Iron Ore's Sishen mine in South Africa ended on Tuesday after police arrested 40 miners while other mining firms threatened mass dismissals to try to halt the unrest.

In a pre-dawn raid, police recovered Kumba's trucks and bulldozers seized by the strikers who had blockaded the pit for almost two weeks.

Since August, more than 80,000 miners have downed tools in often violent walkouts that are hitting economic growth and investor confidence, and raising questions about President Jacob Zuma's leadership shortly before an internal election in the ruling African National Congress (ANC).

The strike at Sishen cost Kumba, a unit of Anglo American and Africa's largest iron ore producer, 120,000 tonnes of lost production a day.

"Any damage to equipment is being assessed and the company has plans in place to restore the mine to full production as soon as possible," Kumba said. Its shares rose 2.7 percent.

On Monday, Kumba fired all the strikers who refused to leave the mine and failed to attend disciplinary hearings, following other mining companies that have resorted to mass dismissals to deal with labor unrest sweeping through the sector.

Anglo American Platinum, the world's top producer of the precious metal, has fired 12,000 strikers. Gold Fields gave the majority of striking miners until Thursday to return to work or face immediate dismissal.

Some workers at its Beatrix mine have already returned to work, but 23,500 across its operations remain on strike.

The company has lost 65,000 ounces of gold production, or 1.2 billion rand ($136 million) in revenue so far and the longer workers stay away, the greater the risk of struggling shafts closing, chief executive Nick Holland said.

"(This) could put at risk certain of our operations where restructuring may become inevitable," he told a conference call. "This could increase the risk of job losses."

Atlatsa Resources fired more than 1,500 workers at its Bokoni platinum mine after they failed to return to work, while bullion and uranium producer Gold One suspended work at its Ezulwini mine for 30 days following the dismissal of more than 1,400 strikers.

Unions said mass dismissals would only inflame tensions.

"We are giving the employers until October 27 to reinstate all workers who are dismissed informally," the COSATU union federation said, threatening action if companies fail to comply.

ESCALATING VIOLENCE

The death toll from two months of strikes stands at more than 50 and the violence is far from abating.

Police said on Tuesday an officer was hacked with a machete when trying to disperse 3,000 striking miners in Rustenburg, north-west of Johannesburg. He was treated in hospital for serious injuries.

Standard & Poor's and Moody's have both lowered South Africa's credit rating, citing a lack of political leadership and rising pressure on the government to throw money at the social problems seeping out of the mines.

Gold Fields' Holland called on all parties to end this "infamous episode in our labor relations history".

"Failure to do so could have unimaginable consequences, not only for the mining industry, but for the whole of South Africa," he said.

Mining companies in South Africa, a major producer of platinum, gold, iron ore, ferrochrome and coal, are already grappling with fast-rising costs and weak demand for commodities due to global economic woes.

While the strike at Kumba and a three-week walkout by truck drivers have ended, the unrest could get worse before improving.

Around 190,000 government workers are planning a nationwide walkout later this week, which could escalate into a full-blown strike, the South African Municipal Workers' Union has said.

Protests have also been reported at individual coal mines, although companies say production has not yet been hit.

(Additional reporting by Olivia Kumwenda; Writing by Agnieszka Flak; Editing by Kevin Liffey and Elaine Hardcastle)

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