Accra (Greater Accra) 20 May '99

Ashanti Goldfields Company (AGC) Limited said on Wednesday that the strike at the Obuasi Mine, its biggest in the Ashanti Group, is costing the company 2,500 ounces of gold (1.7 billion cedis) a day.

"We are losing 2,500 ounces of gold production for every day that the stoppage continues at Obuasi," Mr Trevor Schultz, Ashanti's Chief Operating Officer, said.

In a statement released on Wednesday, the company said the unofficial strike is "extremely unfortunate" as the mine was already having a particularly tight quarter due to the lack of flexibility in surface mining operations.

"Since the premature closure of the Sansu pit five months ago, we have been pushing tonnage hard from Anyinam and Gyabunsu pits and from underground.

"We are no longer producing ore from the high-grade ETS pillar underground, and we do not have the flexibility to make up for unexpected interruptions to production, especially one as serious as this stoppage."

The statement said other gold mines in the Ashanti Group are performing at or above targets in the current quarter and have not been affected by the Obuasi strike.

Giving Management's version of the strike, which started on May 14, the statement said it followed the conclusion of an agreement on May 11, between AGC and the Ghana Mine Workers' Union concerning pay and benefits.

"The wages of Ashanti's 9,000 employees are indexed to the dollar and have increased by 25 per cent in local currency terms over the last two years.

"Ashanti has also made lump sum payments and other benefits, which have been enhanced further under the latest agreement."

The statement said the strike was illegal under the Industrial Relations Act and the leadership of the Mineworkers' Union had called for the strike to stop.

It said it has received co-operation from the police in securing property at Obuasi.

Although production has stopped since May 14, essential services have been maintained and no significant damage has occurred to production facilities.