Job cuts loom at troubled South Deep
Gold Fields considers tightening belt with new shift system
HUNDREDS of jobs are on the line at Gold Fields’s South Deep mine near Westonaria, where operations have largely been shut after two fatalities in the past two weeks.
Frans Baleni, general secretary of the National Union of Mineworkers (NUM), the majority union at South Deep, said the mine planned to move to a new shift system that will result in 500 job cuts.
With the current shift system, agreed on in 2012, employees work four-day, 12-hour shifts followed by four days off.
“I’m told 500 jobs will be lost, notwithstanding that when they imposed the 4x4 shifts they promised more permanent jobs,” Baleni said.
With the current shift system, South Deep benefits from five more working hours a day and seven more production days a year. The system was hailed as a way to increase productivity.
It retrenched more than 2 000 people in 2008 as part of plans to mechanise the mine.
South Deep employs 4 000 permanent workers and about 1 800 contractors.
The development was likely to add to pressure on Gold Fields, the share price of which fell 8% this week. The stock has fallen 40% over the past year.
Gold Fields CEO Nick Holland said this week that talks with the unions were at an early stage, and it was premature to discuss details of the restructuring, in which excess equipment could be removed from underground to “decongest” the mine.
The restructuring follows a review of the mine, Gold Fields’s sole remaining asset in South Africa, which has been managed by a 15-strong team of Australian mechanised-mining experts since February.
The review indicated about 1 000m of critical legacy ground support in the older part of the mine was below international best practice, and posed a safety risk. Production in these areas, which contributed about 70% of the mine’s output, had been stopped for remedial work, Holland said.
The work would take about four months to complete, and it would reduce production by about 48 225oz. At this stage, South Deep remained on track to achieve full production of 650 000-700 000oz by 2017.
However, Holland warned that there was no guarantee the new management team would not identify other issues that might affect production.
After two fatalities last month, the Department of Mineral Resources issued a section 54 safety stoppage, halting all workshop-related activities and effectively stopping production. A “best-case scenario” was that activities will resume early this week, Holland said.
South Deep, in development since the late 1970s, has been plagued by setbacks for decades.
It was hoped initially that the mine would cost R2.7-billion to establish, and reach full production of 800 000oz a year by 2003.
Gold Fields bought the mine in 2007 for $2.7-billion, and has spent $4-billion on development. It initially expected to reach full production this year.