Facing lower gold prices, some South African mining companies say they will cut capital expenditure, jobs and try to sell assets, according to a Bloomberg report.

South Africa’s gold industry focused on increasing production by investing in higher-cost mines during the 10-year bull market through 2012, leaving it with a significant proportion of uneconomic or borderline assets,” HSBC analyst Derryn Maade told Bloomberg.

AngloGold Ashanti Ltd. (ANG), Harmony Gold Mining Co. and Sibanye Gold Ltd. (SGL) were downgraded to sell by HSBC Holdings Plc (HSBA), which said the lower price of gold is cutting margins at South African mines beset by labor disputes, the report said.

South Africa’s mining industry failed to contain costs during a 10-year bull market in gold to 2012 and is now poorly positioned to manage the pressures that come with lower prices, Maade said. AngloGold, Harmony and Sibanye were all reduced from hold.“We expect a 12-month period of extremely tough operating conditions given the current tensions between management and labor, as wage negotiations enter dispute, and the negative implications of potential restructuring on industry jobs,” Maade said. “This period is likely to place momentous pressure on the industry.”

AngloGold, Harmony (HAR) and Sibanye are working through industry lobby Chamber of Mines to dispute South Africa’s four-biggest labor unions after their offer of a 5 percent wage raise was rejected by workers. Bullion’s 23 percent drop this year made 60 percent of gold operations in South Africa, the world’s sixth-largest producer, unprofitable and means companies can’t afford to give employees above-inflation wage increases, the chamber has said.

To counter lower gold prices, mining companies will cut capital expenditure, jobs and seek to sell assets, Maade said. AngloGold on Wednesday suspended its dividend, announced plans to cut 800 jobs at its corporate office and reduce its exploration budget by 60 percent.

The restructuring “is a necessary baptism of fire that will likely result in a leaner, fitter and stronger set of companies with an altered mindset focused on quality as opposed to size,” Maade said.