Harmony Gold could lose about 600kg of gold at its Elandsrand mine after it launched repairs and a probe into an accident that trapped thousands of workers, an official said on Wednesday.
The investigations are expected to last a month at a mine that is one of Harmony’s biggest, producing 51 666 ounces of gold during the quarter to the end of June, nearly a tenth of the firm’s total output during that time.
The probe at the mine owned by the world’s fifth biggest gold producer was launched after rescue workers last week saved all 3 200 miners who were stuck in the mine, about 2,2km below the surface, for more than 24 hours.
”Our production target is 600kg a month so conversely that is what would be lost,” the mine’s manager Stan Bierschenk said.
That amount is equivalent to 19 290 ounces.
”We are busy with the shaft repairs and the investigation on why the pipe burst and broke off causing damage to the shaft, as well as investigating to ascertain other things.”
”We have been accused of not having proper maintenance, not enough emergency supplies, not having secondary escape routes, so even though we know this is not the case, we want to have an exhaustive investigation.”
South Africa’s Minerals and Energy Affairs Minister Buyelwa Sonjica has said she suspected that lack of maintenance was behind the accident at Elandsrand, which she ordered shut for six weeks to allow for investigations, which started this week. President Thabo Mbeki has also ordered an audit on all mines.
Harmony has dismissed allegations of negligence, describing the accident as a wake-up call for the company and the country.
Bierschenk said 5 000 workers at the mine had been sent on leave for three weeks. If the investigation and repairs are incomplete by the time they return, the workers will be placed in various in-house training programmes until the mine is ready.
Harmony has also suspended work on deepening Elandsrand, due to be completed by 2010, to add 18 more years to the life of the mine by digging deeper.
Harmony shares traded 0,25% up at R71,37 by 8.23am GMT, underperforming the gold index, which rose as the metal’s price rose with a softer dollar encouraging buying. – Reuters