OR Tambo hit by mining sector job losses
AngloGold Ashanti tables business overview painting bleak future
AngloGold Ashanti, which has spent about R70m in OR Tambo district municipality since 2012, has tabled a business overview painting a bleak future in the mining sector, with 2,000 people set to lose jobs at the end of the month.
OR Tambo is the area major labour-supplying forAngloGold Ashanti and the imminent mass retrenchment is expected to affect the district heavily.
Tabling a business overview during a community briefing session in Mthatha on Tuesday, AngloGold Ashanti’s sustainability vice-president, Cindy Mogotsi, said the 2,000 retrenchments would be effected by the end of the month.
The briefing was to update the stakeholders on the state of the business and on progress made by the company towards delivering its community development commitments.
“Our mines planned for closure around 2022, but due to economic conditions some of those mines had to be closed five years earlier,” said Mogotsi. She said two mines were closed, while others had been sold.
“About 2,000 employees are likely to be affected. We served notices with the department of labour as well as the department of mineral resources.”
She said they had also made representations to the mineral resources department on June 7 and presented their situation based on the sale of those assets and closure of the two mines.
“It simply means we can no longer carry the same number of people that we currently have at our operations,” she said.
“Basically, what we have tried to do was see how to rationalise the business so that it remains profitable.
“We are looking at different options. In some areas we are outsourcing, in some areas we are stopping certain activities, in some areas we are centralising, but there are some areas that we will be able to sell.
“In that way we are trying to save jobs.”
As required by regulation, section 52 states that in mining if the profit revenue ratio drops below 6% on average over 12 months, that operation can retrench. “Or if the downscaling is more than 10% of the population of employees to be affected you need to give notice to the department of mineral resources. Our mines have not been able to generate more than 6% of profit to revenue ratio over a 12-month period.
“It has become very difficult in the mining sector because prices are very low and the cost of production is proven to be very high,” she said.
“It shows that in 2016, to produce 1kg of gold cost R121,000, but in 2018 it cost us R275,000/kg. The costs are more than double what they were two years ago.”
AngloGold Ashanti sustainability senior vice-president Simeon Mighty Moloko said since signing a memorandum of understanding with the OR Tambo in 2012, they had invested more than R72,2m in development work.