Accident to hurt Harmony profit

2007-10-04 15:08

Carletonville - More than 2 000 scared, exhausted and hungry workers have been rescued after hours deep in a crippled gold mine, and efforts gathered speed on Thursday to bring hundreds more to the surface.

There were no casualties when a pressurised air pipe snapped at the mine near Johannesburg and tumbled down a shaft, causing extensive damage to an elevator and trapping more than 3 000 miners more than a mile underground on Wednesday.

The accident prompted allegations that one of South Africa's most important industries was cutting safety corners in the name of profit - and complaints from the government that mine owner Harmony Gold Mining did not bother to inform it of the potential crisis.

Late news

Minerals and Energy Minister Buyelwa Sonjica said she and President Mbeki learned of the accident on the late evening news.

Mining officials had discovered the elevator was inoperable just after 06:00 on Wednesday. News was first made public by the miners union at 21:00.

Sonjica said during a visit to the Elandsrand mine at Carletonville - a town in South Africa's mining heartland near Johannesburg - that health and safety legislation would be "tightened".

Last year, 199 mineworkers died in accidents, mostly rock falls, the government Mine Health and Safety Council reported in September. One worker was killed last week in a mine adjacent to Elandsrand.

"We have to recommit ourselves to refocus on safety in this country, our safety record both as a company and an industry leave much to be desired," Harmony chairperson Patrice Motsepe said, according to Sapa.

Heat exhasution and fatigue

At the mine, general manager Stan Bierschenk said that while morale was low underground, miners perked up as soon as they were rescued. He said most complained of heat exhaustion and fatigue.

The hundreds of workers who remained underground were all near a ventilation shaft and had been given water - though no food for fear of provoking a scramble among miners who had been underground for nearly two days, according to Peter Bailey, health and safety chairperson for the National Mineworkers Union.

Bierschenk said the company hoped to complete the rescue by lunchtime, although Bailey said late afternoon was more realistic.

Most of the workers were stranded a kilometre and a half underground at the Elandsrand mine and had to be brought to the surface in a second, smaller cage in another shaft.

Sethiri Thibile, one of the first miners rescued, clutched a cold beef sandwich and a bottle of water he was given when he reached the surface.

"I was hungry, though we were all hungry," said Thibile, 32, an engineering assistant who had been underground since 05:00 Wednesday. He said there was no food or water in the mine.

"Most of the people are scared and we also have some women miners there underground," said Thibile.

Family members stood outside the mine offices, complaining that they had not been given enough information about their loved ones trapped underground.

30 minute 'inspection'

As the rescue effort proceeded, allegations of lax safety standards began to fly.

Bailey said that although the company inspected the shaft last week, the check took just 30 minutes rather than the full day required for an exhaustive inspection.

He said that management had allowed the alternative emergency exit to become flooded because it had become complacent about safety standards. He said this was a general trend in the industry.

Acting chief executive officer Graham Briggs denied the allegations of negligence and company officials said that the mine had won safety awards and had a clean track record.

Harmony's share price dropped almost 5% on Thursday morning, but later recovered and was at R75.60 Thursday afternoon, only slightly off the previous day.

Hurting earnings

JPMorgan analyst Allan Cooke said the accident would hurt Harmony's earnings, especially if the shaft remains closed for the entire quarter.

Cooke noted that Briggs had been on the job for only a few months. He was appointed acting CEO in August, after Bernard Swanepoel resigned.

Reluctant announcemnet

Briggs was asked at a news conference about the long delay in releasing details of the accident.

"When an accident like this happens one is reluctant to announce it when we don't know what has happened and how many people may have been hurt," he said.

"This is our priority. It was several hours before we were sure that nobody was hurt and that was in the afternoon."

The government was not satisfied.

"We would have expected them to have contacted us immediately when something huge like this happens because we are also concerned about the well being and safety of miners," said minerals and energy ministry spokesperson Bontle Mafuna.

600kg of gold every month

Harmony's Elandsrand mine is the third largest producing gold mine in South Africa. The company said it produces an average of about 600kg of gold every month.

South Africa is the world's largest producer of gold as well as a number of other minerals. Government statistics from 2005 said 55 different minerals were produced from 1 113 mines and quarries, of which 45 produced gold.

Harmony boss Motsepe said he had been in the mining business since the 1980s and could not remember another incident in which so many miners had been trapped below ground.

He committed the mine and the company to cooperate fully with the investigation and scheduled an urgent meeting with union leaders.

"We run companies that have an obligation to all constituencies," he said, according to Sapa. "Shareholders are one of those constituencies but we have an obligation to our employees (as well)," he said.

- AP

- AP