One thousand five hundred and sixty mineworkers could be laid off at Gold Fields’ loss-making South Deep mine.
The mining company has invested approximately R32-billion since it acquired the mine in 2006, in an attempt to restore operations at the mine.
Gold Fields noted that rising operation and overhead costs, consistent failure to meet production targets, challenging geotechnical and ground conditions, and poor equipment reliability were some of the issues that the mining company is facing.
“It is envisaged that approximately 1 100 permanent employees could potentially be impacted by the proposed restructuring. In addition, approximately 460 contractors could also potentially be impacted,” Gold Fields said in a statement released on Tuesday.
South Deep currently employs 3 614 full-time employees and 1 940 contractors.
Gold Fields has completed two phases of its organisational restructuring plan. In the last quarter of 2017, the mining company reduced its management levels by 25%, and in first quarter of 2018, 261 employees voluntarily left the company.
The mining company has also revised its production targets — its production for the second quarter of 2018 was only marginally higher at 1 518kg than 1 485kg in the first quarter, but South Deep continues to face organisational and structural challenges.
“Overall labour productivity is significantly below industry average,” Gold Fields said.
“Given the significant impact of the restructuring from late 2017 and early 2018, we are unable to quantify the impact of the proposed large scale restructuring on production in 2019 and beyond,” Gold Fields added.
Gold Fields announcement follows that of Impala Platinum which earlier this month had said it would cut 13 000 jobs at its mines over the next two years to address losses at its Rustenburg mines.
Gold Field has served section 189 notices — which detail dismissals based on operational requirements in the Labour Relations Act — on its two representative trade unions, the National Union of Mineworkers and UASA (formerly known as the United Association of South Africa).
According to the statement, Gold Fields said it had informed the Minister of Mineral Resources Gwede Mantashe of its plans.
We are beginning to notice a worrying trend where some companies do not meaningfully engage with @DMR_SA on their restructuring plans, & only brief us as a mere formality or tick-box exercise, ignoring processes outlined in the law which are binding to every mining right-holder pic.twitter.com/0SvuAydDNQ
— Gwede Mantashe (@GwedeMantashe1) August 14, 2018