AngloGold mine shutdown woes
News fuel job loss anxieties
ANXIETIES about jobs heightened this week when the news broke that AngloGold, the world’s third-biggest gold mining company, was shutting the unprofitable Savuka section of TauTona in Carletonville near Johannesburg and putting on care and maintenance Kopanang mine in Klerksdorp.
“All my hard work has failed if we get retrenched. Getting laid off means going back home to Libode in the Eastern Cape to a house of hunger,” said Bafundi Seku, a worker at AngloGold Ashanti's TauTona mine.
“I have a two-year-old child and my unemployed wife is pregnant. I support seven people, including myself, because I lost a sister, who left behind three children.”
Seku, 42, has been working at AngloGold for a year. Along with 8 499 of his peers – a third of the mine’s entire workforce – he faces the possibility of losing his job.
This week, AngloGold said it was shutting down the two unprofitable operations that are nearing the end of their lives. The 59-year-old TauTona, whose shafts reach depths close to 4km, is second only to AngloGold's Mponeng mine in age.
“We have got to a stage now where hope can’t be a strategy. We are getting to a point where these mines are exhausted and we have to take action. If we don’t, it threatens the viability of other mines,” AngloGold CEO Srinivasan Venkatakrishnan said.
The decision comes after poor first quarter results. South African output fell 16% compared with the previous period, performing below levels of its international operations.
From the beginning of August last year – AngloGold’s peak over the past five years – the company’s valuation has plunged almost 60% on the local bourse, while the dollar price of gold has declined by just under 9%.
The rand has not aided its prospects, strengthening close to 7% and eating into dollar earnings. AngloGold is still reviewing whether parts of TauTona mine could be integrated into Mponeng mine instead of shutting down the operation completely.
At the moment, Venkatakrishnan said, the likelihood of a complete shutdown was slim.
Workers to whom TMG spoke in and around the operations were incredulous about the threat of retrenchments, while others were still trying to come to terms with the implications.
A mineworker at Savuka, a section of TauTona, who did not want to be named, said: “They said it was going to be a long process before retrenchments, but what can we do? It’s unfortunately the reality of life.”
It has become increasingly difficult and costly to mine TauTona and Kopanang. The further miners bore into the earth, the more areas become unreachable for workers to access without causing harm to themselves.
Gold ore reserves are near to depletion. South African gold production peaked in 1970, producing 1 000 tons, compared to 141.4 tons last year.
AngloGold has been criticised for being slow to turn around its South African assets but Venkatakrishnan said its key performing mines, Mponeng and Moab Khotsong, had indeed recovered.
AngloGold's job cuts were going to happen regardless of the furore around the Mining Charter.
However, the industry has been outspoken about the economic impacts of the third iteration of the charter if it were implemented in its current form. The Chamber of Mines estimates about 50 000 to 100 000 jobs could be lost in the sector, with an additional 100 000 to 200 000 indirect and mining-related jobs. — TMG