SA’s Har­mony Gold to cut jobs

Lesotho Times - - Busi­ness -

JOHANNESBURG — Har­mony Gold, South Africa’s third-largest bul­lion pro­ducer, said Tues­day it will cut jobs at its trou­bled Kusasalethu mine to try re­turn­ing the op­er­a­tion to a profit, as it has con­sis­tently recorded losses since Septem­ber 2012.

Kusasalethu, which is Har­mony’s largest mine by out­put, has been hit by strikes, union ri­valry, tech­ni­cal glitches and a shut­down needed to re­move il­le­gal min­ers.

The As­so­ci­a­tion of Minework­ers and Con­struc­tion Union, which held a five-month strike in South Africa’s plat­inum mines this year, be­came the ma­jor­ity union at the site in 2013.

The con­sul­ta­tions on job cuts are tak­ing place over 60 days as out­lined in sec­tion 189 of the Labour Re­la­tions Act.

Kusasalethu had cash out­flows of M392 mil­lion rand in the year ended June and posted cash losses of M112 mil­lion the fol­low­ing quar­ter, Har­mony said. The mine, which strad­dles South Africa’s Gaut­eng and North West prov­inces, has been in op­er­a­tion since 1968.

Chief Ex­ec­u­tive Of­fi­cer Graham Briggs said the com­pany has be­gun a 60-day con­sul­ta­tion with unions at the mine, which em­ploys about 6 300 peo­ple in­clud­ing con­trac­tors.

Dur­ing this time, the par­ties will con­sider avoid­ance mea­sures that may in­clude of­fer­ing vol­un­tary sep­a­ra­tion and early re­tire­ment pack- ages to em­ploy­ees as well as seek­ing to trans­fer as many em­ploy­ees as pos­si­ble to va­can­cies that ex­ist else­where in the com­pany.

“Kusasalethu has not re­turned to prof­itabil­ity af­ter var­i­ous set­backs,” Chief Ex­ec­u­tive Of­fi­cer Graham Briggs said in the state­ment.

“We need to be both de­ci­sive and mind­ful in our ac­tions so that we pre­serve the vi­a­bil­ity of this mine for sev­eral decades to come.

“With­out th­ese ac­tions, this mine will not sur­vive and that would in­deed be a tragedy for our com­pany, our em­ploy­ees, our com­mu­ni­ties and our coun­try.”

The new plan for the mine —lo­cated about 75 kilo­me­tres west of Johannesburg— will in­volve dig­ging a lower vol­ume of ore at higher grades and re­duced cost, Mr Briggs said.

Gold pro­duc­ers in gen­eral are caught in a bind as prices tumble and costs rise, forc­ing com­pa­nies to shelve ex­plo­ration projects and re­assess cap­i­tal-in­ten­sive op­er­a­tions.

The spot price of gold slipped around 1 per­cent on Tues­day and has shed about 13 per­cent of its value over the last 8 months.

Spokesman for the Na­tional Union of Minework­ers Livhuwani Mamm­bu­ruu said the union had not re­ceived any no­tice from Har­mony of its in­ten­tions to cut jobs.

“We are very sur­prised that Har­mony is re­trench­ing but as the NUM we will fight very hard to save th­ese jobs,” he said.

“We are not go­ing to al­low com­pa­nies to re­trench how­ever they want.” Mamm­bu­ruu said the union would meet with Har­mony’s man­age­ment this week to dis­cuss its plans.

Ri­val union As­so­ci­a­tion of Minework­ers and Con­struc­tion Union (AMCU), which rep­re­sents about 72 per­cent of the min­ers at Kusasalethu, could not im­me­di­ately be reached for com­ment.

AMCU led a five-month strike at plat­inum mines in the coun­try and also stopped work last year at An­glo Amer­i­can Plat­inum to op­pose planned lay-offs.

Job cuts are a dif­fi­cult is­sue in South Africa, where the job­less rate is around 25 per­cent and there are still big in­come dis­par­i­ties.

Har­mony said im­prove­ments and in­vest­ment into the Kusasalethu mine had been fruit­less and its new plan would en­tail min­ing lower vol­umes at higher grades at a re­duced cost.

“Har­mony’s in­ten­tion is to re­store the mine to prof­itabil­ity in the fourth quar­ter of the cur­rent fi­nan­cial year,” it said.

Shares in Har­mony were up 2.6 per­cent at M18.74 rand. The shares are trad­ing at around 16year lows. — Busi­ness­week

Kusasalethu is the fifth deep­est mine in the world.

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