Harmony’s planned buy-out of Gold Fields would not benefit miners or South Africa, according to trade union Solidarity and National Union of Mineworkers (NUM) on Monday.
“Up to 7 000 Gold Fields workers can lose their work if Harmony gets control of Gold Fields and implement a cost cutting exercise on the 46 000 strong workforce of Gold Fields,” said Solidarity spokesperson Dirk Hermann said.
The union based this on a statement by Harmony’s chief executive Bernard Swanepoel on Monday.
He said: “We calculate that we need a 15% cost reduction on Gold Fields’ South African assets to justify our premium from this source alone.”
NUM is concerned about the way in which the hostile bid is being handled.
“It is very strange that South African companies are incapable of sitting and talking to each other about this matter,” said NUM Secretary General Gwede Mantashe.
“Instead they both prefer approaches that send jitters into the market and the economy.
“We believe that they should find a way through which they can come together and engage over this issue so that an amicable situation is realised soon.”
Mantashe said that while the gold price is high, in US dollar terms, companies should be investing in development and growth to create work opportunities.
Instead the companies are choosing “consolidation and shrinkage”.
Mantashe said: “Both companies are the same ones that have been at the union’s throat with notice after notice of section 189, intending to close shafts and/or retrench workers.”
Hermann said one of the first things Harmony might do if it gains control of Gold Fields is to issue a section 189 notice in terms of the Labour Relations Act, informing trade unions “of the group’s intention to lay off workers due to operational requirements”.
Hermann said Harmony has carried out “large-scale staff retrenchments every time it takes control of a new mine.
“The Harmony way of gold mining operations has already resulted in the dismissal of 5 000 workers and 3 000 contractors this year.”
He said Gold Fields had retrenched only 400 workers and 780 contractors due to operational requirements.
Solidarity planned to opposed the proposed take-over at the Competition Commission.
NUM was also concerned about the involvement of foreign-based companies in South Africa’s economy.
Num called for a proper discussion between Harmony and Gold Fields. “This will enable certainty and stability within the industry.”
Harmony has said it would offer a 29% premium for Gold Fields on the basis of 1,275 new Harmony shares for each Gold Fields share and 1,275 new Harmony American Depository Shares (ADS) for each Gold Fields ADS.
Harmony said the offer had received the full backing of Russia’s Norilsk Nickel, which owns 20% of Gold Fields, AFP reported.
Swanepoel would reportedly not be drawn into how many jobs could be on the line, telling a news conference: “There obviously will be some reductions,” and adding: “We have a very good track record as job savers and not job destroyers.” – Sapa
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