Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
AngloGold Ashanti (NYSE:AU) said on Monday its mines in South Africa remain at a standstill amid a wildcat strike which began on 20 September 2012 at its Kopanang operation and spread to five other mines a week later.
The company said in a statement it has obtained a court interdict to formally declare the strikes, which affect 24,000 of its 35,000 workforce in South Africa, unprotected. This figure is inclusive of contractors and those working on two major capital projects under way at the Moab Khotsong and Mponeng mines.
“Clearly for South Africa’s gold sector, as for many others, there is a very clear trade-off between investing in the sustainability of our business and not putting employment at risk,” Chief Executive Officer Mark Cutifani said. “If the current unprotected strike continues, it compounds the potential likelihood of a premature downsizing of AngloGold Ashanti’s South African operations.”
South Africa accounts for roughly a third of Anglogold’s annual output and the company is losing more than 32,000 ounces – worth more than $55 million at today’s prices – of production a week.
Anglogold said the South African gold industry is in the second year of a two-year wage agreement with the latest increases, ranging from 8% to 10%, awarded to the workforce in July, under and agreement reached in 2011. A similar increase was awarded last year.
The wildcat strikes across the South African mining including at other gold producers like Gold Fields and the world’s number one platinum miner Amplats were prompted by the killing of 44 people, the majority at the hands of security forces, at the Marikana platinum mine more than a month ago.
The African nation produced 221 tonnes of gold last year compared to world number one producer China with 380 tonnes.
South Africa, now also behind the US and Australia, ranked number one for gold output in the world for a century before losing the top spot to China in 2007.
At its peak in the late 1960s the gold fields of the African nation produced more than a 1,000 tonnes of the yellow metal per year.
