New offer to end Gold Fields strike likely to be rejected, says union

Gold Fields has not been able to produce since the strike began, resulting in a cash burn of around R6-million per day and R70-million in lost wages. (Delwyn Verasamy/M&G)

Gold Fields has not been able to produce since the strike began, resulting in a cash burn of around R6-million per day and R70-million in lost wages. (Delwyn Verasamy/M&G)

Gold Fields has presented a new offer to the National Union of Mineworkers in an attempt to end the union’s almost four-week strike against retrenchments, but a union official says it is unlikely to be accepted.

The company is offering a “sweetener” to the retrenchment package. It has also proposed to provide sacked employees with skills training and make provision for a “call-back” option, which will allow them to be first in line to be reemployed if opportunities arise, provided they match the requisite skill set.

The union has until 17:00 on Friday to accept the offer before it lapses.

Gold Fields announced a restructuring plan in August for its loss making South Deep mine in Westonaria, west of Johannesburg. The NUM downed tools on November 2 in protest against 1 082 employees and 420 contractors losing their positions, following the Section 189 process facilitated by the Commission for Conciliation, Mediation and Arbitration.

Speaking to the media in Sandton on Wednesday, Gold Fields CEO Nick Holland said he is unable to foresee how long the industrial action would continue if the offer isn’t accepted by Friday. The market has already been informed there will be no further gold production from South Deep for the remainder of the year.

“There’s no turning back from the process,”  Holland said, adding that the retrenchments were undertaken as a last resort to save the remaining 4 000 jobs at the operation.

South Deep is the world’s second largest gold-bearing ore mine, but has been unprofitable for a decade, due to deep deposits and rising costs.

‘No new offer’

NUM branch secretary at South Deep Thulani Mashibini told Fin24 that nothing had materially changed in the mining group’s latest offer, and the union would reject it.

“We want to meet with Gold Fields to come to a reasonably acceptable number of retrenchments.”

Mashibini said the union did not have an ‘optimum’ level of job losses at Gold Fields. This would be determined by further discussions with the gold company.

He agreed with Minister of Mineral Resources Gwede Mantashe who said on Monday, following a meeting with Gold Fields, that the firm is not acting in good faith.

“We were the first to say that Gold Fields is engaging a tickbox exercise [during the Section 189 process]…they are not interested in avoidance measures,” Mashibini said.

Holland took a careful line when commenting on Mantashe’ s criticism, thanking the minister for taking the time to discuss the situation. “I understand there is significant pressure to try get the [mining] industry to grow and not to contract.”

R70m in lost wages

Gold Fields has not been able to produce since the strike began, resulting in a cash burn of around R6-million per day and R70-million in lost wages.

Holland said the company will still need to calculate the extent of infrastructure damage during strike action. He complained that a court order against violence and intimidation was defied when maintenance teams were denied access to operations.

Gold Fields has received messages from 1 900 employees who want to go back to work, added Holland, which he said indicated that a majority of employees were against the prolonged industrial action ahead of what promises to be a bleak festive season for workers.

The company’s share price has dropped approximately 16% since August 13, ahead of the restructuring announcement. Holland said this reflected a number of factors including investors’ uncertainty as to whether South Deep could be returned to profitability. — Fin 24

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