Update On The Reported Industrial Action At Crocodile River Mine OperationsMay 11, 2011
Mr. Ian Rozier, President and CEO of Eastern Platinum Limited (“Eastplats” or the “Company”) wishes to clarify various reports with respect to recent events at the Crocodile River Mine (“CRM”) during the period of wage negotiations that coincide with national elections.
Further to ongoing wage negotiations at CRM, a meeting was held on Thursday 5th May at CRM by the members of the National Union of Mineworkers (“NUM”) during which the Company’s most recent revised wage offer was communicated to its members. This revised offer was rejected by NUM members.
On Friday 6th May, mine vehicles were driven by employees through the security gate to the Zandfontein Mine causing damage to mine property. Employees then embarked on unprotected industrial action. Mine services at both Zandfontein and Maroelabult underground mines were also damaged, and for safety reasons, the management at CRM instructed the mines to be vacated. Approximately 180 workers then proceeded to unlawfully occupy the mines. Mine management advised employees to cease this illegal action, and simultaneously, a court interdict against NUM and its members was granted that instructed NUM and the employees involved to cease the action and vacate the mine. The workers involved made several demands to management, as well as threats of damage to mine property and underground infrastructure if management did not comply with these demands. To safely resolve this situation, to prevent it from escalating, and to safeguard the overall integrity of mine installations, management had numerous meetings with NUM and instructed them to ensure that their members vacated the mine and ceased their unprotected strike action. An offer was made by mine management to resolve the situation but this was rejected by NUM and/or the employees involved who refused to vacate the mine and made yet further demands of management that were rejected. As these workers refused to vacate the mine, the offer made by management was then withdrawn.
Following the failure to resolve this illegal action by some of their members, NUM invited the Congress of South African Trade Union (“Cosatu”) to assist in negotiations with the instigators of the illegal industrial action. Certain statements were made by the Cosatu and NUM representatives to their members in order to encourage them to vacate the mine. There was no agreement in place between CRM and NUM/Cosatu at this time. The workers involved in the illegal action subsequently vacated the mine.
On Saturday 7th May, after the mine had been vacated, management temporarily suspended operations at CRM pending the results of a safety inspection of the shafts to inspect damage to mine infrastructure. The full extent of this damage was subsequently found to have involved the sabotage of underground electrical and pumping equipment that resulted in flooding, as well as damage to the ventilation system. This was regarded as a serious threat to mine safety, and in line with protocols as set out internally and by the Department of Mineral Resources (“DMR”), further safety audits were made to assess damage and to begin conducting repairs to ensure the safety standards continue to be met. Employees were informed through their unions that CRM intended to suspend mining operations in order to make the mine safe for employees. NUM was informed that all employees involved in the illegal occupation and other unlawful acts were suspended pending a full investigation.
To clarify certain allegations made by Cosatu, none of the NUM members involved in the illegal action have been dismissed at this time and the Company is conducting a full investigation of events, including statements made by some workers that were forcibly prevented from vacating the mine. Furthermore, no workers have been “locked out” as stated by Cosatu. The mine progressively resumed operations once safety concerns had been addressed and the mine concentrator continues to operate. However, there has been further unprotected industrial action, including an unlawful blockade at the mine entrance to intimidate and prevent non-striking employees from going to work. If this situation continues, then the Company intends to deal with all workers who do not report for work from the commencement of the morning shift on Thursday 12th May 2011 in accordance with the legal procedure available to CRM.
The Company wishes to state categorically that it has at all times acted in good faith and within the protocols as set out in the application for safety protocols and labour relations legislation, and conducts all its actions in accordance within the legal framework governing such actions.
Eastplats and the management at CRM are deeply offended by the accusations made by Cosatu that CRM exploits its workers, has a racist attitude towards its workers, participates in “modern day slavery and human trafficking”, and discriminates against females with respect to maternity leave, or at all. Eastplats is proud of its safety record at the mine (currently standing at over 3 million fatality free shifts), the working conditions at CRM, the conditions of employment for all its employees, including training programs, housing arrangements and benefits, and its proactive social and labour plan. At all times, the Company has acted in the best interests of safety and is confident that it has the support of the DMR for its actions undertaken to ensure a safe working environment for all employees at the mine.
“We regret these illegal actions by a very small minority of our employees at CRM and hope for a speedy resolution to this issue”, stated Ian Rozier.
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Certain statements included herein constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements are based on certain assumptions by Eastplats and therefore, readers are cautioned that forward-looking statements are not a guarantee of future performance. There can be no assurance that such statements will prove to be accurate and actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, changes in government legislation, controls, regulations and political developments. Specific reference is made to the Company's most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.
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