CAPE TOWN, South Africa—Global miners pursuing veins of gold and platinum thousands of feet deep here are running up against a spate of safety-related work stoppages, driving costs higher and hindering the industry’s recovery even as demand for precious metals picks up.
Bloomberg NewsMany South African gold and platinum mines are deep underground. A worker drills at the Impala Platinum mine in Rustenburg in 2008.
In 2009, South African government mining inspectors ordered one of the world’s biggest gold miners, AngloGold Ashanti Ltd., to suspend sections of its operations 44 times; that compared with 20 times in 2007. The suspensions contributed to a 14% production decline at the company’s South African mines from a year earlier.
Lonmin PLC, the world’s third-biggest platinum miner, said it lost about 5% of its production during its 2009 fiscal year due to safety-related work stoppages, more than twice the figure from the previous year.
South African government inspectors ordered its global competitor, Anglo Platinum Ltd. to stop work 61 times in the year. Angloplat, a unit of Anglo American PLC, said the mine closures lasted anywhere from a few minutes to a few days.
The work stoppages come amid a renewed emphasis on safety in South Africa across an industry with a deadly track record. Companies, unions and the government together pushed for an improvement in safety after a series of accidents in 2007 reversed what had been a trend of declining fatalities.
In the 1990s, mine safety came into focus. At the time, South Africa had emerged from apartheid and was moving to multiracial democracy. Unions were becoming more powerful and a once-isolated industry opened up to international investment and looked toward international safety standards.