AngloGold plans to cut 8 500 jobs
Miner restructuring loss-making operations
ANGLOGOLD Ashanti (AGA) yesterday announced that it planned to cut its workforce by nearly 8 500 across all local operations as it restructures loss making units in a bid to protect the viability of the business.
The world’s third biggest gold producer said it would place its loss making Kopanang mine, in the Vaal River region, and the Savuka section of the TauTona mine in the West Wits Region, which has operated for 59 years, on care and maintenance amid rising costs.
AGA said it was also going to assess the feasibility of integrating elements of the 60year old TauTona mine into the neighbouring Mponeng mine and would review the associated costs at the regional level, particularly support services and overheads. The restructuring followed a review on how to keep the loss making operations afloat, as some of its older local mines had reached the end of their economic lives.
It said TauTona and Kopanang faced systemic challenges, including near-depletion of ore reserves, increasing depth and distance from central infrastructure. In addition, declining production profiles, and cost escalations that have continued to outpace both inflation and a weak gold price were problematic.
Chief executive Srinivasan Venkatakrishnan said that the restructuring was a difficult decision to make.
“This… follows a period of significant and – ultimately – unsustainable losses, and also the evaluation of the options available to return our South African business to profitability,” Venkatakrishnan said.
“It is critical that we act to protect the long-term sustainability of this business and the majority of our workforce. We are mindful of the sensitivity that this situation demands, and are committed to supporting all our employees throughout this process.”
The restructuring put a dampener on Statistics South Africa (Stats SA) data, which on Tuesday showed that the mining sector added 8 000 employees in the first quarter – an 1.8 percent growth compared to the last quarter of 2016.
Stats SA painted a bleak picture of job losses as employment data indicated that the country shed 48 000 jobs in the first quarter as gross earnings declined by R19.3 billion during the period.
The looming AGA job cuts also add to the perfect storm facing the struggling mining industry which shed 70 000 jobs in the past five years and faced further uncertainty following the gazetting of the 2017 Mining Charter two weeks ago.
The National Union of Mineworkers (NUM), the biggest union in the mining industry, confirmed it had received Section 189 notification and said its shop stewards would meet next week on a way forward.
“We therefore call on AngloGold Ashanti to rethink its position to retrench. They must create opportunities for job creation rather maximising profits at the expense of the poor mineworkers who earn poverty wages,” spokesperson Livhuwani Mammburu said.
It vowed to fight tooth and nail to make sure that its members were not retrenched cheaply. “The NUM remain fearless, committed, dedicated and unshaken in fighting for the mineworkers,” the union said. “The NUM does not want to see mineworkers being retrenched.” Trade union Solidarity attributed the retrenchments to the gazetting of the 2017 Mining Charter.