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Johannesburg - Gold producer DRDGOLD [JSE:DRD] subsidiary Blyvoor plans to cut about 500 jobs, the company said on Tuesday.
"The reason for the need to consider the reduction is that Blyvoor has... been unable to meet production and financial targets, a situation exacerbated by higher utility costs," DRDGold said in a statement to the JSE.
Since June, Blyvoor gold mine had been undergoing business rescue proceedings in terms of chapter six of the new Companies Act.
The business rescue practitioner would enter into a 60-day consultation process on Tuesday with the National Union of Mineworkers and Uasa, DRDGold said.
The consultation had to be done in terms of section 189 of the Labour Relations Act.
"Blyvoor is proposing voluntary separation and application of the principle of 'last in, first out' as among the mechanisms to be applied to effect the required reduction in employee numbers," DRDGold said.
On June 23, DRDGold said it would no longer finance Blyvoor, which needed about R80m to keep going until the end of 2011.
DRDGold owns 74% of Blyvoor, south of Carletonville.
Blyvoor was considering other measures to achieve a targeted 30% improvement in production costs to avoid job cuts. These included reducing overtime costs, reorganising shifts, reducing department costs by 10% and revising mining plans.
According to its website, Blyvoor employs about 4 500 people including contractors.
Blyvoor was granted an extension to November 1 2011 to publish a business rescue plan.
Once finalised, Blyvoor creditors have to vote on the plan. If it is not approved, Blyvoor would go into liquidation.
Union to oppose move
The National Union of Mineworkers (Num) said it will oppose "with the necessary vigour" the planned retrenchments.
Saying it had learnt with shock about the planned retrenchments, it said it would "fight and nail with the errant company".
It charged that DRDGold, which was awarded "worst employer of the year" by the Cosatu in 2004, continued "to treat workers like dirt and threaten them with closure".
"At a time when workers wanted increments, DRD Gold later closed the East Rand Proprietary Mine (ERPM) whilst it had earlier closed others such as Crown. The National Union of Mineworkers calls on the Department of Mineral Resources to blacklist DRD Gold and its directors from continuing with any mining business in the republic," the union said.
In September, the Num declared a wage dispute with DRDGold at the Commission for Conciliation, Mediation and Arbitration (CCMA) after the company offered its workers a 3% wage increase.
"The reason for the need to consider the reduction is that Blyvoor has... been unable to meet production and financial targets, a situation exacerbated by higher utility costs," DRDGold said in a statement to the JSE.
Since June, Blyvoor gold mine had been undergoing business rescue proceedings in terms of chapter six of the new Companies Act.
The business rescue practitioner would enter into a 60-day consultation process on Tuesday with the National Union of Mineworkers and Uasa, DRDGold said.
The consultation had to be done in terms of section 189 of the Labour Relations Act.
"Blyvoor is proposing voluntary separation and application of the principle of 'last in, first out' as among the mechanisms to be applied to effect the required reduction in employee numbers," DRDGold said.
On June 23, DRDGold said it would no longer finance Blyvoor, which needed about R80m to keep going until the end of 2011.
DRDGold owns 74% of Blyvoor, south of Carletonville.
Blyvoor was considering other measures to achieve a targeted 30% improvement in production costs to avoid job cuts. These included reducing overtime costs, reorganising shifts, reducing department costs by 10% and revising mining plans.
According to its website, Blyvoor employs about 4 500 people including contractors.
Blyvoor was granted an extension to November 1 2011 to publish a business rescue plan.
Once finalised, Blyvoor creditors have to vote on the plan. If it is not approved, Blyvoor would go into liquidation.
Union to oppose move
The National Union of Mineworkers (Num) said it will oppose "with the necessary vigour" the planned retrenchments.
Saying it had learnt with shock about the planned retrenchments, it said it would "fight and nail with the errant company".
It charged that DRDGold, which was awarded "worst employer of the year" by the Cosatu in 2004, continued "to treat workers like dirt and threaten them with closure".
"At a time when workers wanted increments, DRD Gold later closed the East Rand Proprietary Mine (ERPM) whilst it had earlier closed others such as Crown. The National Union of Mineworkers calls on the Department of Mineral Resources to blacklist DRD Gold and its directors from continuing with any mining business in the republic," the union said.
In September, the Num declared a wage dispute with DRDGold at the Commission for Conciliation, Mediation and Arbitration (CCMA) after the company offered its workers a 3% wage increase.
