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Annual report suite 2012

Responding to the strike in South Africa

Mike O' Hare

PODCAST

Mike O’Hare
AngloGold Ashanti
Executive Vice President: South African Region

AngloGold Ashanti’s perspectives on the 2012 strikes in South Africa

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Gideon du Plessis

PODCAST

Gideon du Plessis
The Trade Union: Solidarity
General Secretary

Solidarity’s perspectives on the 2012 strikes in South Africa

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In August 2012, more than 55 people died at and around platinum mines in South Africa in violent clashes between trade union members, miners, and members of the South African Police Service (SAPS) related to issues in the platinum industry, in particular at Lonmin.

AngloGold Ashanti recognises and mourns this tragedy. A Presidential Commission of Inquiry has been convened and its proceedings are seeking to uncover the causes of this violence and to make recommendations for the future.

In the weeks that followed the tragedy at the Marikana platinum mine, employees engaged in a series of unprotected strikes that swept across the entire mining sector. Protest action was often violent with high levels of intimidation reported.

AngloGold Ashanti was also severely affected by these events as it spread to the gold sector and to our operations. Employees at our Kopanang mine embarked on an unprotected strike on 20 September with those at the three West Wits operations and the balance of the Vaal River region’s operations joining them on 25 September 2012. Most employees had returned to work by 26 October 2012, although there were scattered incidents of disruption elsewhere after this date. The main exception was Mponeng where a series of sit-in protests continued for some weeks. The effect of the unprotected strike was to halt operations for an extended period of time.

Throughout this period, AngloGold Ashanti continued to interact as constructively as possible with the strikers and their representatives. This was done in the knowledge that we would need to resume mutually respectful working relationships and to minimise the risks of human rights impacts as had been seen in the platinum sector and elsewhere.

This approach included, for example, consciously avoiding as far as was feasible the threat of dismissal, notwithstanding the unprocedural and unprotected nature of the strike. This tended to minimise the adversarial, sometimes violent, responses experienced at other affected mines. The approach used at Mponeng when sit-ins and incidents of vandalism continued after the resolution of the strike at other operations was to suspend operations, in order to diffuse tensions, rather than threaten dismissal. AngloGold Ashanti’s approach to the strikes was not to take any short-term action that would result in us deviating from our defined long-term strategy of improving management/employee relationships in our business. This meant no retaliation for the illegality of the strike and a concerted effort to secure a safe, quick and sensible return to work without giving in to the excessive demands. We believe this was achieved at our mines.

The process of rebuilding our relationships with labour has begun. While the latter stages of the strike action were unfortunately marred by acts of vandalism at one of our mines, the strike action passed for the most part without serious violence and without physical harm to any of our employees. Nonetheless, AngloGold Ashanti acknowledges that the strikes had damaging impacts on all involved – employees, their families, the communities around the mines and the company.

While the strike action was the result of many extraneous factors beyond the control of the company or indeed beyond the control of the unions, the strike – the first of such magnitude at our operations in more than 20 years – signalled the need to improve relationships with employees and communication within the company. Close communication was maintained with other stakeholders during the strike period, including with the departments of Mineral Resources and Labour, local communities, mayors and other local authorities, contractors and suppliers.

AngloGold Ashanti remains committed to respecting fundamental labour rights, including the right to organised and centralised collective bargaining. In dealing with the strikes, our aim was to maintain the integrity of that system, which we believe has served the industry – both employees and employers – well.

While we consider it important to maintain the collective bargaining system, we do not view the labour caucus as being exclusive and invite all labour representatives, with proven credentials of representivity, to participate in negotiations.

The ramp-up of production, while maintaining safe and secure working conditions following the strike, was complicated by the depth of the affected mines and the protracted period of inactivity caused by the strike. The strike had a material adverse impact on fourth quarter performance in the South Africa region.

AngloGold Ashanti estimates, as a result of the strike, that the company lost production of approximately 235,000oz, and adjusted headline earnings of about $208m in 2012. Given the ‘no work, no pay’ policy that prevailed, employees also suffered financial setbacks, as did our contractors, suppliers and businesses in our local communities.