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Gold Fields Workers Back to Work

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Gold Fields Limited (GFI - Free Report) announced that National Union of Mineworkers (NUM) ended the strike at its South Deep mine after they received a two-year salary deal from the Chamber of Mines. The striking workers had demanded higher wages which could not be given at that time on account of falling gold prices.

According to the new two-year wage deal, the employees belonging to Category 4 and 5 and rock drill operators will receive an 8% hike in their salary while pay of other employees will be raised by 7.5%.

In the second year of the deal, employees will receive further Consumer Price Index (CPI)-linked increases effective Jul 1, 2014. The current monthly living out allowance will increase to R2,000 from the current level of R1,640 in two R180 steps, on  Sep 1, 2013, and Sep 1, 2014. The new wage deal at South Deep will also apply to members of the other union active on the mine, UASA.

Gold Fields, which is one of the major South African gold miners, along with Harmony Gold Mining Company Limited (HMY - Free Report) , Anglo Gold Ashanti (AU - Free Report) and Sibanye Gold Limited , released its second quarter results in Aug 2013. The company reported adjusted (barring one-time items) loss from continuing operations of 5 cents a share, in contrast to the prior-year quarter’s earnings of 15 cents.

On a reported basis, the company posted a net loss (attributable to Gold Fields stockholders) from continuing operations of $128.5 million or 18 cents per share in the quarter compared with a net income of $105 million or 15 cents per share a year ago. The sharp loss was a result of lower gold price, less gold quantity sold and the negative gold price adjustment of $13 million associated with prior and present concentrate shipments at Cerro Corona.

Revenues decreased about 22.6% year over year to $637.1 million in the quarter from $823 million registered in the year-ago quarter. Average gold price declined 13.3% to $1,372 per ounce from $1,582 per ounce recorded in the second quarter of 2012.

Gold Fields currently retains Zacks Rank #2 (Buy).

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