Harmony Gold will keep its Kusasalethu mine closed while it considers whether to continue its operations there or begin retrenchments, the company said on Monday.
Harmony said it had started a process under section 189 of the Labour Relations Act which may result in the closing of the Kusasalethu mine and possible retrenchments.
"Management is of the view that the status quo concerning production and labour strife will remain, as it has exhausted all possible avenues to achieve normal production and cannot find a solution to the current state of lawlessness prevailing," Harmony said in a statement.
The miner said it had a "legal and moral" obligation to secure the safety of the employees at the mine.
"These legal and moral obligations have been severely undermined to the point that it has become an impossible task given the unlawful and violent events during the December 2012 quarter," the company said.
The miner said the closure and retrenchments would be avoided if an agreement could be reached to end the labour unrest that plagued the mine in December.
These negotiations to re-open the mine and avoid retrenchments would have to result in a "lasting and sustainable" solution.
"Should the aforesaid goal not be achieved by means of a consultation and discussion process then the company will have no alternative but to continue and conclude the section 189 process which might lead to the indefinite closure of Kusasalethu and possible retrenchments," Harmony said.
The company generated R134 million in profits from the Kusasalethu mine in the third quarter of 2012.
However, due to the mine's labour woes, the cash flow for the December quarter fell into the red for a R150 million loss as Kusasalethu achieved only 22 percent of its planned gold production.
"Should the current poor performance continue, then the situation at Kusasalethu is dire for the rest of the 2013 financial year and into the future," the company said.
In December, more than 1000 employees staged an underground sit-in at the mine demanding that their fellow employees, who had been suspended, be reinstated.