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Johannesburg - Bullion producer Harmony Gold [JSE:HAR] said on Tuesday it will temporarily close its Target 3 shaft because it is bleeding money, a move that could affect up to 1 500 jobs.
Job cuts are a sensitive issue in South Africa, where close to a quarter of the workforce is unemployed and labour tensions are raw, especially in the mining sector which has been hit by a wave of often violent strikes the past three years.
Harmony said it would take measures to minimise and try to prevent job losses because of the placing of the operation on "care and maintenance", which means it will be closed for an indefinite period of time.
"Despite numerous initiatives by both management and organised labour to return Target 3 to profitability, this operation has continued to record cash flow losses," Harmony said in a statement.
"Given the current gold price environment, and the significant capital investment required to sustain operations at this shaft, Target 3 is predicted to continue to make a loss in the foreseeable future," the company said.
Harmony last week said it fell to a fourth-quarter loss because of a R1.4bn write-down on an expansion project at its Phakisa operation, which was shelved because it would have required too much capital.
The company said it expected output of about 1.2 million ounces of gold in its 2015 financial year after producing 1.17 million ounces last year.
Read: Bosses warn of metal sector jobs bloodbath
