Mining for gold and other metals is a messy business. In some cases, the public might just want to think of it like boudin because no one wants to know how it comes together. Now we have yet another mining strike in Africa. Gold Fields Ltd. (NYSE: GFI) is calling the strikes at two mines in Ghana illegal.
Gold Fields said that employees at its Tarkwa and Damang mines in Ghana have embarked on illegal industrial action that has led to production at both mines being stopped. The company holds a 90% interest in the mines. This strike follows the Ghana Mineworkers Union, and its affiliates called the Professional Managerial Staff Union and the Branch Union, presenting management with a number of demands yesterday. The company also said that these groups threatened industrial action if the company did not respond positively to the demands within 24 hours.
What is said to be at issue is a dispute in the determination of profit share payments to employees and other issues. Gold Fields listed more issues being the unconditional reinstatement of an employee who was dismissed following an internal disciplinary procedure, dissatisfaction with certain management structures, the removal of certain members of senior management, concerns about catering delivery models and allegations of discrimination between expatriate and Ghanaian employees. The company said that it is analyzing and investigating the demands “as a matter of urgency” but also said that it appeals to all of its employees to maintain law and order while this process is underway.
Gold Fields said, “The company holds the view that the industrial action is illegal and unprotected. This could expose participating workers to the no-work, no-pay rule as well as possible dismissal.”
Apparently shareholders are also dismissing the shares. In New York trading, the ADRs of this South African company are down more than 2% at $7.16. The stock hit a new 52-week low of $7.12 earlier in the morning, versus a 52-week high of $12.09. Note that Gold Fields still has a market cap of just over $5.2 billion.
The Market Vectors Gold Miners ETF (NYSEMKT: GDX) is also weak on the news, or perhaps on the trend of gold and gold miners continuing to head south. At $35.67, this just hit a new 52-week low as well, down at $35.55, this morning.