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Gold Fields says unlawful strike erupts at KDC West mine in South Africa

Published: 13:34 10 Sep 2012 EDT

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Strikes are spreading in South Africa, with Gold Fields Limited (JSE:GFI) (NYSE:GFI) (NASDAQ:GFI) the latest to announced an illegal strike at its KDC West mine in South Africa. 

The strike started the night shift on Sunday, and continued into the morning shift today. 

Around 15,000 employees are participating in the work stoppage, the company said, and all production at KDC West has been suspended as a result. 

Platinum prices made solid gains last week on the back of continued labour strife at Lonmin's(LON:LMI) Marikana mine - where violence erupted last month and an estimated 50,000 ounces of Platinum production are thought to be lost because of the disruption. 

Investors are concerned that the Platinum strikes, which have been ongoing for more than a month, will spread to gold, impacting supply of the yellow metal. 

Gold Fields said the senior leadership of its South Africa region and KDC are on the mine engaging with the striking employees, the various unions and other structures, with a view to finding "a speedy and peaceful resolution". 

"At this stage the reason for the strike remains unclear but we hope to gain clarity as soon as possible," said executive VP and head of Gold Fields' South Africa region, Peter Turner, in a statement Monday.

"The situation on the mine has been calm and peaceful since the start of the strike and we appeal to all stakeholders to continue to act with restraint and to engage in good faith. 

"It is important that we restore normality in a peaceful manner and as soon as possible."

The company will today apply for an urgent interdict to bring the strike to an end.

The Platinum strikes were sparked by a turf war between the established National Union of Mineworkers (NUM), which is closely affiliated with the current governing party, and AMCU at the Marikana mine, and has led to about 3,000 of Lonmin's 28,000-strong South Africa workforce to walk out. 

Gold Fields is one of the world's largest unhedged producers of gold with attributable annualized production of 3.5 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa. 

It has total attributable gold equivalent mineral reserves of 80.6 million ounces and mineral resources of 217 million ounces. 

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