The trade union Solidarity on Wednesday said it is to ask mining group Kumba Resources to impose a two-year moratorium on retrenchments.
The trade union claimed that Kumba is persisting with the retrenchment of 400 workers in spite of a very profitable financial year.
The request will form part of Solidarity’s Save the Workers campaign, in which the union is to ask all role-players in the mining industry for a two-year moratorium on forced retrenchments.
Solidarity admitted that gold mines in particular are under tremendous pressure due to the strong exchange rate.
The union pointed out that the case of Kumba is quite different, however, from that of the marginal gold mines.
“Indications are that Kumba can expect to get as much as 70% more for its iron ore than it did in 2004. The group is also greatly expanding its production capacity in order to supply in the increased demand for iron ore, particularly from China,” Solidarity argued.
The union added that Kumba’s share price increased by R4,24 on Tuesday.
“The group is experiencing a capacity crisis due to the fact that the Sishen Saldanha railway cannot handle the increased volumes — a problem that Kumba has already taken up with Spoornet.”
According to the union, Kumba last week announced turnover of R12,6-billion and net profits of R942-million for the past 18 months.
“If the turnover and net operating profit figures as at December 31 2004 are compared with those on December 31 2003, they show a 15% increase in turnover and an increase of 41% in net operating profits.”
The trade union said that in spite of these good results, favourable expectation for future profits and the planned increase in production capacity, Kumba issued an Article 189 notice in October last year to announce its intention of laying off 400 workers.
These lay-offs spring from the Kumba business improvement project that was launched in February last year, the union said.
Solidarity had asked to be part of the process, but accused Kumba of proceeding unilaterally and merely informed the trade unions of its outcome, which includes the retrenchment of 400 workers.
“Kumba is shooting itself in the foot,” said Solidarity spokesperson Dirk Hermann.
“Market conditions are extremely favourable for the company. The group should follow an aggressive growth strategy in order to take advantage of the higher world prices of iron ore. Now is not the time to talk about retrenchments.”
The union argued that Kumba should rather urgently investigate employing additional workers in order to utilise these opportunities.
“Ore prices are at record levels and Kumba is extremely well positioned to benefit from them,” according to Hermann.
Solidarity stated that the request for a moratorium will be tabled at the next round of consultations between Kumba and the recognised trade unions.
Kumba employs 9 960 people, of whom 1 300 are members of Solidarity. — I-Net Bridge