The Harmony Gold-owned Kusasalethu gold mine may be closed down permanently as managers receive death threats and police are attacked, prompting an emergency closure of the mine.

Following the threats to senior managers at Harmony Gold – which is South Africa’s third largest gold producer – the company announced today that the decision was taken to delay reopening of the mine after the festive holiday, due to the potential for violence and attacks on the mine.

“There is an extremely high risk something could go wrong at Kusasalethu in its current state. We are drawing a line in the sand,” announced Harmony Chief Executive Graham Briggs today, explaining that not only had death threats been received, but police had been shot at, reports Reuters.

The implications of the on-going stoppage to production after the scheduled Christmas period could be wide-ranging, with the company revealing it has also launched financial and operational reviews as well as legal procedures that could lead to the overall halt to active operation at the Kusasalethu mine.

Should this be the outcome of the procedures, the mine will be put under “care and maintenance”, meaning that active mining would not take place but a small core of staff would remain to handle the safe maintenance of the infrastructure.

This would mean some 6,000 workers at the mine – which is one of the only gold producers recording increasing output over the recent period – losing their employment as only a very small team would be needed to oversee the “care and maintenance” phase.

Griggs also noted that putting the mine into this hibernated state – despite only being a short-term solution – would cost the company in the region of 400 million Rand ($46.5 million).

This latest development on the South African mining scene indicates that the turmoil experienced over the second half of 2012 may not be over as hoped, Harmony having battled with repeated outbursts from its workers even up to the Christmas break.

Despite having resumed full operation following illegal strikes in line with those prevalent over the whole industry over the closing months of 2012, the company saw a short under-ground sit-in by workers protesting against the dismissal of those who participated in the illegal strikes.

Fears are now growing that the scale of dismissals that may be seen should Harmony have to close more permanently may prompt the renewed outbreak of violence in the area.


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