Gold Fields’ South Deep Mine faces strike today

GOLD Fields chief executive Nick Holland will consider bringing production to a halt at the company’s struggling South Deep Mine as the National Union of Mineworkers (NUM) down tools today to oppose retrenchments that will cut the workforce by 30 percent.

The union served the company with a 48-hour strike notice of its intention to strike over the company’s decision to retrench up to 1 560 employees at South Deep.

Holland said about 80 percent of the mine’s workforce are NUM members and the strike would impact production adversely.

“Safety of employees is paramount and, if deemed necessary, South Deep would also consider cessation of production for a limited period of time,” Holland said.

South Deep is under financial strain after struggling to meet production targets despite Gold Fields investing R30 billion in the last 10 years to make it a world-class mechanised mine.

In August, the company announced that it was planning to restructure its operations in the country.

The group said the restructuring would see 1 500 employees retrenched.

Holland said the mine had consulted with organised labour to explore options that would include ways to keep the mine sustainable with limited job losses.

He said the company offered voluntary severance packages which was taken up by 177 employees.

Holland said South Deep still needed to axe 1 100 jobs and targeted employees were served with notices on Wednesday.

He said the group would also cut 420 contractors.

Prior to the restructuring, South Deep employed 3 614 full-time employees and 2 214 contractors.

Holland said the mine had reached a critical stage following previous unsuccessful initiatives to improve productivity.

“The restructuring will help to reduce the risk of continuing operating losses and consolidates the current mining operations as a first step to building a sustainable, long-term operation,” he said.

“Unfortunately, the retrenchments and the reduction in contractor numbers have become essential to ensure this and to save the remaining 3 500 jobs.”

Gold Fields bought the South Deep mine in 2006. It has failed to bear positive results.

In August, Gold Fields, in addition to the restructuring, slashed gold output, and impaired the mine by R4.8bn. It bought the mine in 2006 and turned it into a mechanised mine.

Last month Holland reportedly requested shareholders to exercise “patience” with the South Deep mine.

Kanetso Matabane, chairperson of the NUM South Deep, said the strike would continue until the company acceded to its demand for the retrenchment plans to be canned.

“South Deep cannot add to South Africa’s already high unemployment rate. The strike will continue until the government intervenes,” Matabane said.

Gold Fields rose 0.79 percent on the JSE yesterday to end the session at R39.50.