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REGIONAL NEWS - AFRICA Harmony Closes Kusasalethu Mine, Seeks Solution to Labor Unrest Mali Gold Mines not Affected by Conflict Labor-related disruptions and violence have prompted Harmony Gold to close indefinitely its Kusasalethu mine in South Africa. (Photo courtesy Harmony Gold) Harmony Gold announced in early January that following a review of both the financial and operational impact of lawlessness, violence, and non-compliance to South Africa's Mine Health and Safety Act at its Kusasalethu mine near Carletonville during the fourth quarter of 2012, it would keep the mine closed until such time as it is safe enough for its employees to begin mining activities. The Kusasalethu mine was temporarily closed December 20 for security and safety reasons. Events at Kusasalethu beginning October 26 that led to the closure included violence leading to the murder of two employees and injuring of one person, five illegal underground sit-ins, damage to mine property, physical assault of the mine manager, threats that members of management should be attacked or killed, live ammunition fired at police and mine security, noncompliance of policies and procedures of the operation, incidents of employees refusing to comply with normal shift schedules and other work-related instructions, an attempt to burn down union offices, and illegal mass meetings and marches by the Association of Mineworkers and Construction Union (AMCU). Harmony said it would enter into a discussion/consultation process with the various stakeholders as defined by South 18 E&MJ; • FEBRUARY 2013 African law that will take 60 working days from the time the process begins. The aim of the discussion/consultation will be to seek a lasting and sustainable solution to avoid the closure of the mine. The Kusasalethu mine has 35.1 million mt of mineral reserves grading 6.30 g/mt gold and containing more than 7 million oz of gold. Annual production has the potential range between 260,000 and 300,000 oz/y over an estimated mine life of about 25 years. The mine employs about 6,000 people. Harmony CEO Graham Briggs said, "We wish to engage with all stakeholders in order to reach an agreement that will bind all employees of the mine and that will provide management with sufficient assurances that there will be a return to normal, safe operations and production at the Kusasalethu operations. We wish to seek a sustainable and lasting solution that would ensure that the security, safety and health situation at the mine is normalized and compliant with all applicable laws and the policies and procedure of the mine." He added, "Kusasalethu achieved substantial successes in terms of production growth, strong cash flows, and excellent safety results before the December 2012 quarter. We do trust that we will be able to rescue this mine in the next couple of months, provided it can be run safely and return to being cash flow positive." Randgold Resources reported in midJanuary that its Loulo-Gounkoto gold mining complex and its Morila joint venture with AngloGold Ashanti were operating normally following the declaration of a state of emergency in Mali as French forces joined the Malian army in confronting Islamist insurgents in the north of the country. The Randgold operations are about 700 km from the conflict zones. Randgold Chief Executive Mark Bristow said the company was nevertheless closely monitoring events and had put contingency plans in place to ensure that it could continue to contribute to the economy of Mali while protecting Randgold's people and property. Should the current military buildup impact logistics, both operations are well-stocked with fuel and other consumables, Bristow said. Iamgold commented briefly in its January 22 production report for the fourth quarter of 2012 that it was business as usual at the Sadiola and Yatela gold mines operated by the its joint venture partner AngloGold Ashanti in Mali. The escalation of conflict in the country had not disrupted production nor had there been any interruption in supply chains. The mines are about 1,300 km from the conflict zones. Iamgold said it was reducing its exploration activity in the region as a precautionary measure. As of late January, Resolute Mining and Endeavour Mining, which operate gold mines in the south and west of Mali, had not commented on the conflict to the north nor indicated that it was having any impact on their operations. B2Gold Starts Construction of Otjikoto Gold Project B2Gold Corp. has started construction of the Otjikoto open-pit gold project in Namibia, 300 km north of Namibia's capital city of Windhoek. The project is owned 92% by B2Gold and 8% by EVI Gold (Pty) Ltd., a Namibian black empowerment group. The Otjikoto feasibility study describes a project that has an initial mine life of 12 (Continued on p. 26) www.e-mj.com