Harmony Gold Says 3,200 Miners Stuck Underground (Update2)
By Stewart Bailey
Oct. 3 (Bloomberg) -- Harmony Gold Mining Co., Africa's third-largest gold producer, said 3,200 workers are stuck more than a mile underground at its Elandsrand mine in South Africa after a falling pipe damaged the shaft.
A pipe broke from a column near the surface ``due to fatigue'' and plunged down the 2,200-meter (1.4-mile) shaft, spokeswoman Amelia Soares said. An adjacent shaft normally used to haul waste is being refitted so that rescuers can start hoisting 300 miners an hour to the surface by midnight local time, she said.
The pipe collapse ``caused a lot of damage to the steelwork and electrical feeder cords,'' Soares said today in a telephone interview from Johannesburg. ``There have been no injuries.''
Mines in South Africa are the world's deepest and among the most dangerous, with 113 workers killed last year by rock bursts, mudslides, tremors and exploding gases. About 440,000 people work in mines in the country, which has a 26 percent unemployment rate.
Declining production from South Africa's mines has forced companies including Harmony and Gold Fields Ltd. to dig deeper shafts to tap the Witwatersrand Basin, the world's largest gold deposit, which lies under Johannesburg. South Africa is the world's largest producer of the precious metal.
The miners reported for work almost 19 hours ago, at about 4 a.m. local time, said Deon Boqwana, regional chairman for the National Union of Mineworkers, the country's largest labor union.
`Disaster'
``An escape route is the most important thing and they have failed miserably,'' Boqwana said in a telephone interview from the mine. ``They need to ensure that the shaft is maintained. This is why we have this disaster. Our main worry is for more than 3,000 people who are underground.''
Harmony's former chief executive officer, Bernard Swanepoel, quit on Aug. 7 after running the company for more than a decade and orchestrating the acquisition of aging mines and cutting costs to boost profit margins.
Harmony's American depositary receipts, each equal to one share, dropped 61 cents, or 5.5 percent, to $10.46 at 4:22 p.m. in New York Stock Exchange composite trading, paring the company's market value to $4.18 billion. The stock has dropped 34 percent this year, making it the worst performer of the 16- member Philadelphia Gold & Silver Index.
Mine Disruptions
The damage today at Harmony's Elandsrand mine follows an underground fire last month that burned for more than nine days at the company's St. Helena mine, which reduced production.
Elandsrand was acquired from AngloGold in 2001, giving Harmony access to a 6.9 million-ounce gold deposit, according to a presentation posted on the company's Web site.
Harmony has plans to deepen the shaft to 3,566 meters to tap richer seams of gold and extend the life of the mine. South African mines pump chilled water down pipe columns into underground reservoirs, helping cool air heated by underground rock temperatures which exceed 110 degrees Fahrenheit (43.3 Celsius).
A container used to transport ore plummeted more than a mile down the main shaft at the South Deep mine west of Johannesburg in May 2006, wrecking the shaft now owned by Gold Fields. The damage took almost a year to repair and cut production at the mine in half.
South Africa's gold production dropped 7.5 percent to 8.85 million ounces last year, its lowest level in 84 years.
To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net .
Map highlighting Carletonville, Gauteng province S. Africa. 
As many as 3,200 mine workers became trapped in the in Elandsrand mine, a gold mine in South Africa about 50 miles (80 km) west of Johannesburg in Carletonville, Gauteng, after an incident on October 3. All miners have been rescued, and none of them were injured. The mine is owned by Harmony Gold Mining Corporation.

The mining company says that a lift electrical cable broke on a basket that was carrying miners, trapping thousands at least 2,200 meters (1.3 miles) below the earth's surface. Reports from ''MSNBC'' and the ''Guardian Unlimited'' say that the shaft may have collapsed when a water or air pipe burst. The rescue operation went well with no complications, with the rescue taking just under 24 hours to complete.

"They were underground when the accident happened and they were not able to surface because an electric feeder cable that is connected to the mine lift was severed," said a spokeswoman for the mining company, Amelia Soares. The snap was caused by a "fatigued" air pipe which burst and fell down the shaft damaging the "steelwork and electrical feeder cords," added Soares. "They are all in good condition."

"They are all safe. There have been no injuries or deaths," said CEO of Harmony mining, Graham Briggs who also said that the miners were previously contacted and were given "food and water."

Earlier reports had stated that Lesiba Seshoka, a spokesman with the National Union of Mineworkers, said that the miners have not been heard from for hours and that they could have been enduring temperatures as high as 105 degrees Fahrenheit (40 degrees Celsius).

"This is a terrible situation. The only exit is blocked, probably by a fall of ground," said Seshoka.

Rescue workers used a mine shaft that is next to the damaged one in an attempt to reach the trapped miners, and lifted them out, 75 at a time. There was no emergency exit in the shaft which is reported to have "not been maintained for ages," added Seshoka.

"An escape route is the most important thing and they have failed miserably. They need to ensure that the shaft is maintained. This is why we have this disaster. Our main worry is for more than 3,000 people who are underground," said National Union of Mineworkers for S. Africa chairman, Deon Boqwana.

Current reports say that "negligence" was the initial cause for the pipe burst and that there has been a history of negligence from the mine. "We suspect negligence. Because of continuous operations there is no time to make adequate checks," said the President of the Miners union, Senzeni Zokwana to reporters during a news conference.

The Elsrand mine is currently under development and has been since February 2001 when Harmony bought the mine. Officials state that the mine will remain closed for a minimum of six weeks, while an investigation is performed, and the mine is deemed safe for miners to continue working in it.

The mine is located in the Witwatersrand Basin of South Africa, which is said to be the location of the largest area of raw gold on the planet.