With the Rand gold price close to all-time highs the spreading strikes in the gold sector will see mines losing out on making the most of rising prices.
Today's price is trading around the R471 400/kg level having broken through an all-time high yesterday.
The country's second largest gold producer, Gold Field, saw a strike at its KDC West mine enter its 11th day today with the miner losing 1 400 ounces per day. Assuming 10 production days that is a loss of 14 000 ounces at roughly R14 700 per ounce or R206m in lost revenues.
AngloGold, the largest gold producer based in South Africa, became the latest illegal strike casualty with its Kopanang workers downing tools last night. The company said it had not yet received any communications from workers outlining demands.
With AngloGold's measures to diversify its portfolio approximately 32% of total production originates from South Africa. Kopanang, near Orkney in the Free State province, contributed 4% or 90 000 ounces for the first half of the financial year ending 30 June 2012. This equates to around 500 ounces lost per day or R7m.
These two mines contribute approximately 15% or 700 000 ounces to the country's total annual gold production of around 4.7m ounces.
Junior producer, Village Main Reef's joint CEO, Marius Saaiman, said that the high gold price, if sustainable, would be extremely advantageous to its star performer, Tau Lekoa, and that it would give its other high cost producers, like Buffelsfontein, breathing space.
Village released results today that showed a turn-around from last year's losses on a gold price of R417 267/kg in 2012 compared to R305 397/kg for 2011. The miner reported an earnings per share figure of 34.73 cents for the year ended 30 June compared to a loss of 290.32 cents for the previous year.
With Village's modus operandi of acquiring distressed assets and turning them around, Moneyweb/Mineweb asked if it would consider looking at acquiring Great Basin Gold's Burnstone mine after it recently went into business rescue.
Saaiman said that it had its hands full having recently taken over underground mine, Blyvoor, from DRDGold and that it wasn't interested in entering a bidding war for the Great Basin Gold assets.
Meanwhile, company spokesperson for Anglo Platinum, Mpumi Sithole confirmed today that workers had not returned to work last night as hoped and that attendance numbers across its Rustenburg mines had now dropped to below 20%.
Sithole said that levels of intimidation were high and people were still afraid to go to work. The company announced yesterday that production at its process units and the Bathopele mine had resumed. This, Sithole said, had resulted in protestors turning their efforts to preventing attendance at Bathopele today.
Reports that striking miners had received permission from the local municipality to stage a meeting at the Bleskop stadium were rejected by Sithole who said that the stadium belonged to Anglo Platinum and that no such permission had been given. The stadium was unsafe for the number of people in any event said Sithole.
The miner had issued an ultimatum saying that it would pursue legal avenues should workers not return to work by the night shift last night. With current events, it has had to move this ultimatum out for the second time to Monday evening.
The reality is that dismissing workers who were not participating in the strike yet were too scared to return to work for fear of reprisal poses a dilemma.
Sithole said that the company was awaiting a CCMA (Commission for Conciliation, Mediation and Arbitration) hearing scheduled for next week Tuesday that would address workers' demands handed over to the miner in July.
In separate events, justice minister Jeff Radebe announced today that the investigation into the shootings at Lonmin's Marikana mine would be completed within four months.
In August, President Jacob Zuma, announced a three-member judicial commission of inquiry to probe the mine violence in which 44 people had died in Marikana. Two more people have died since then.
