Wednesday, February 29, 2012

Labor unrest in Egypt's largest gold mine

Egypt Independent
Workers continue to protest at Sukari gold mine

Tue, 07/02/2012

Jano Charbel

The Sukari Gold Mine, Egypt's largest and oldest, has been witnessing numerous acts of labor unrest amidst allegations of corruption, smuggling and other controversies.

Located in the southeast of the country some 30 km away from the Red Sea City of Marsa Alam, this massive gold-mining project has been rocked by numerous industrial actions since the 25 January Revolution — including work-stoppages, slow-down strikes, hunger strikes and protests, along with the blocking of roads leading to and from the mine.

Most recently, the mine's two main entrances/exits have intermittently been blocked by tens of protesting workers since late January. Workers employed at this mine claim that they are being systematically exploited by the administration, are being punitively sacked, and are denied their basic labor rights.

"All production has been brought to a halt at the Sukari Gold Mine. There is an ongoing strike and sit-in of all workers within the mine. This open-ended strike has been going on for four days now — since 3 February," said Mohamed Hamed, Deputy Director of the Marsa Alam Youth Center for Development.

The General Manager of the Sukari Corporation, Esmat al-Raghy, posted a notice on 3 February announcing that the workers' demands are still being investigated and will be looked into over the course of the next 15 days.

Quoting a worker within the mine, Hamed added, "A delegation from the Ministry of Manpower's bureau in Hurghada visited the mine on Monday, but makes no promises regarding the realization of workers' demands. The workers are seeking concessions from Egyptian Mineral Resource Authority (EMRA) and/or the Ministry of Petroleum."

Meanwhile, Raghy reportedly "threatened the workers with dismissal, and also threatened to enforce a lock-out throughout the mine." Furthermore, he "called on the armed forces to take over the operations in the Sukari mine," Hamed added.

Workers find these labor grievances hard to understand in light of claims that Sukari is among the ten largest gold mines in the world, with deposits estimated at US$20 billion. It produces around eight to nine tons of gold each year and, according to the EMRA, has potential for increased production.

Centamin Egypt, the chief company managing the mine since 2007, is an Australian mineral exploration and mining company. Centamin commenced operations in 2009 and currently employs some 1,150 workers within the mine, while over 3,000 others are employed by its subsidiary companies outside the mine. Employment policies of these subsidiary companies, particularly the Pharaoh Gold Mine Company and the Sukari Corporation, are the purported cause of labor unrest both inside and outside the mine.

"Workers at the mine typically work 12-hour shifts, in one of the most dangerous and physically-exerting occupations," said Ahmed Fahimi, an industrial safety specialist who was fired from his job two months ago. "Although the vast majority of workers are working full-time and even overtime, very few have signed any contracts."

According to Fahimi, the subsidiary companies’ management has refused to provide their workers with full-time contracts, have not paid overdue bonuses, do not provide adequate insurance for their workers, and deny workers the right to organize themselves in unions or leagues.

Fahimi, along with other workers, claims that the management of these subsidiary companies are "interlinked businesses controlled by the Raghy Family."

Adding that the company boards are characterized by "nepotism, punitive and arbitrary sackings of workers, illegitimate profiteering and smuggling along with administrative and financial corruption … anybody who asks for their rights, or stands up against the administration's abuses can expect to be fired with no compensation whatsoever," Fahimi said.

Raghy declined to answer questions regarding employment policies, environmental standards or industrial actions at the mining project. Raghy said, "I cannot comment, as information previously disclosed has been distorted in the media."

Workers at the mine claim they have been threatened with dismissal if they speak with the media.

Speaking on condition of anonymity, a worker employed at the Sukari Corporation said: "We demand eight-hour work shifts instead of the 12-hour shifts that they force us to work each day." Other demands include full-time contracts, the payment of overdue bonuses, the reinstatement of all workers who were punitively sacked, safer working conditions, health insurance and subsidized housing near the project, or at least housing compensation money.

"There is no job security, we are subject to dismissal upon notice, and we haven't received any of the bonuses we were promised years ago when we first started working here," the anonymous worker added.

There had been a preliminary agreement to reinstate fired workers in another operating company — the Capital company — rather than the Pharaoh Gold Mine or the Sukari Corporation from which they were sacked. However, this agreement has not been implemented in light of the ongoing strike.

Since "only a few contracts" have been signed by workers employed at the mine, the rest are deemed to be temporary workers and thus are not granted insurance policies or the right to establish a legally recognized trade union.

Monthly wages for workers at the Sukari Gold Mine are said to range from LE1,300 to 2,000 (around US$235-360), while the wages of engineers and specialists range from LE2,000 to LE7,000 (around US$360-1,270). While these wages are well above average incomes in Egypt, workers toil for the equivalent of nearly two shifts each day, doing physically demanding labor while being exposed to scorching heat and near-freezing nights.

According to Fahimi, industrial accidents in the mine happen almost on a daily basis.

"Dust inhalation from extraction and processing have resulted in respiratory illnesses amongst the workers, while pits and falling rocks have resulted in serious injuries, broken bones, and even some work-related deaths."

He added that "an accident involving a cyanide spill could claim the lives of tens, or even hundreds, of workers."

Regarding environmental hazards, Fahimi stated: "While cyanide is used in a number of operations within the mine, the companies seem to be abiding by Egyptian environmental standards."

Fahimi pointed out that "while the companies claim that the cyanide used is not seeping down into the groundwater, other industrial chemicals have been spilled and have in fact seeped into the groundwater." He claimed that three years ago, around six tons of hydrochloric acid was spilled in an industrial accident, and "no authority was informed — it was their dirty secret."

The mining operations consume tremendous amounts of water drawn from the nearby Red Sea.

"The mining project has harmed the environment, but it has harmed the health and well-being of its workers even more. This mine should bring prosperity, but instead its gold is being smuggled outside the mine and even outside the country," Hamed said.

"We have acted as mediators," along with the mayor of Marsa Alam City, "and have sought to re-instate 24 workers sacked from the different companies operating in the mine," Hamed added.

Like Fahimi, Hamed claimed that "nepotism and favoritism are the norm within the administrations, along with profiteering from illegal activities." Last month, however, Minister of Petroleum Abdullah Ghorab, along with authorities from EMRA, denied that any gold smuggling from the Sukari Mine had taken place.

Centamin began operating in Egypt in 1995, and the Sukari Gold Mine is its chief operation in the country. The mine spans an area of 160 square kilometers. This land was leased to Centamin with an operating license from EMRA for a period of 30 years. This license is subject to renewal for another 30 years.

Completed by 2007, the mining works cost Centamin US$216 million to construct; its operations began by first quarter of 2009. Centamin’s annual expenditures in the Sukari Gold Mine amount to US$365 million. The Egyptian State imposes a three percent tax on its production for a period of 15 years. In 2010, Egypt earned US$10 million from gold production from this royalty fee with Centamin.

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