DRDGold mine strike

DRDGold mine strike

DRDGold Ltd, South Africa`s fourth largest goldminer, has announced that a three-day illegal strike over pay has brought Blyvooruitzicht, its largest mine, to a halt with some groups of workers calling for a pay increase of up to 40%.

Company spokesman Ilja Graulich said that the disruption at Blyvooruitzicht, DRDGold`s only remaining South African underground mine after the closure of two operations in 2005, will result in a drop in production which will hit profits at a time when South African gold miners are benefiting from high gold prices and a strong US dollar versus the South African currency .

The company has threatened to sack around 4,000 miners if they don`t return back to work by Sunday February 18, said Mr Graulich.

John Sayers, the new chief executive of the company is under instructions to find ways to pay creditors of the company`s Australasian unit after closing its Fijian operations in December, but is answerable to shareholders in North America, which make up 65% of its investor base, despite its primary JSE listing.

“This is just another piece of bad news for them,” said David Shapiro, fund manager at Safin Holdings Ltd.. ” I`m starting to lose track.”

Blyvooruitzicht accounts for about 30% of DRDGold`s output. It produced 40,477 oz of gold at a cash cost of US$542/oz in the three months to September 30, according to DRD`s website.

Source: www.mining-journal.com

Share this post