Three of De Beers Consolidated Mines’ underground Kimberley operations, that together are forecast to deliver a loss of R150-million for 2005, are to be closed.
This week De Beers confirmed an “in-principle” decision to close the Wesselton, Dutoitspan and Bultfontein mines and are consulting with the National Union of Mineworkers (NUM) regarding retrenchments that the Mail & Guardian believes could affect in excess of 900 employees.
De Beers has confirmed that a number of retrenchments are being contemplated but chose to remain tightlipped about retrenchment numbers, stating that it was “premature” to speculate on the final impact.
The future of the Koffiefontein mine is also in doubt with consultation currently taking place between NUM and De Beers to limit the number of retrenchments originally contemplated. The M&G has been informed that the closure of the mine would result in a further 400 to 500 retrenchments.
De Beers spokesperson Nicola Wilson says the strengthening of the rand, the age of some operations and operating efficiencies are all impacting upon the mines’ profitability.
“At current exchange-rate levels, five of De Beers’s operations are unprofitable with only Venetia and Finsch mines making a profit,” says Wilson.
Wage negotiations between NUM and De Beers are still under way with the company this week agreeing to separate the gain-sharing scheme from the negotiations.
NUM spokesperson, Parks Modise, says: “We have said to them that they must take the gain-sharing process out of the negotiations. If they want to negotiate gain-sharing then we will negotiate, but only once we are fully informed about the process, we cannot walk into something we don’t know.”
The gain-sharing scheme delivers bonuses dependent on performance in excess of each mine’s business plan.
De Beers’s current wage offer sits at 7,5% for their lowest-paid employees and 7% for the rest of the employees, but the union wants a 10% increase.