South African gold mining company Durban Roodepoort Deep (DRD) may be forced to close its North West operations because of the weak gold price.
The group disclosed on Monday that because of weak gold earnings in rands it was being forced to review the North West operations, which comprise the Buffelsfontein (Buffels) and Hartebeestfontein (Harties) mines in the Klerksdorp gold field region of the Witwatersrand Basin.
“In light of the continued weakness of the gold price in Rand terms and following extensive management actions, Durban Roodepoort Deep Limited is forced to enter into a 60-day review which may impact on the future of its North West Operations.
“This review, which will be independently monitored, will encompass all necessary measures to realign the North West Operations’ cost base and productivity, as well as to evaluate further restructuring options.
“In addition, the outcome of this review will have to take cognisance of the prevailing gold price level and the rand/dollar exchange rate.
“Notwithstanding the fact that the North West Operations have performed within their budgeted costs as forecast at 30 June 2002, these steps have now become inevitable due to continued cash losses, the mining company said in a statement.
All unions and associations had been notified in terms of the Labour Relations Act, it said.
“A total of 13 000 employees (including contractors) may be affected by this process. Consultation will begin immediately regarding the possible reduction of labour in excess of current operating requirements.” – I-Net Bridge