Job cuts set to rip through mines

Jan 06 2013 13:37
André Janse van Vuuren, City Press

Mine strife has hit the sector hard. (City Press)

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Johannesburg - Forecasts of widespread retrenchments across South Africa’s gold and platinum mining sectors are set to become a reality this month for thousands of workers as companies finalise their restructuring plans in the wake of last year’s industry-wide strikes.

Harmony Gold Mining Company [JSE:HAR] could become the first strike-hit major gold producer to announce layoffs following a last-minute review last week into the financial and operational status of its Kusasalethu mine near Carletonville – the source of employment for about 5?200 workers, excluding contractors.

Employees who returned to work on Thursday following the scheduled Christmas break were sent home, pending the outcome of the review.

Kusasalethu’s operations were suspended for most of October due to the industry strikes. Two workers were killed in November in what the company said appeared “to be inter-union rivalry”, while a sit-in by some 1?700 workers last month forced the company to close the mine a day earlier than planned for the Christmas break.

Harmony’s executive for corporate and investor relations, Marian van der Walt, said the decision to undertake the review was taken earlier last week as the company was looking to reassess both the impact of the earlier strikes and its subsequent efforts to return to normality.

“Everything (the build-up to full production post the strikes) went well until we had the deaths in November,” she said. “Since then we have never got the productivity levels right. Kusasalethu is an expensive mine and we need to take all this into account.”

She added that the group was also looking for assurances on safety from trade unions, given the earlier killings and sit-in.

Asked whether the process could culminate in restructuring and retrenchments, Van der Walt said the group had various alternatives it could consider.

The outcome is likely to be communicated early this week, she said.

The prospect of dismissals at Kusasalethu came after the CEO of the Chamber of Mines, Bheki Sibiya, told the Cape Town Press Club in November the mining industry will retrench thousands of miners in the first quarter of this year.

Gold producer AngloGold Ashanti [JSE:ANG] is in the midst of a review of all its South African operations, while Anglo Platinum [JSE:AMS] is expected to announce the outcome of a review of its assets within the next few weeks.

The National Union of Mineworkers’ general secretary, Frans Baleni, said on Friday the union was still waiting for an official briefing from Harmony on the situation at Kusasalethu.

“We haven’t heard anything yet, but I wouldn’t be surprised if they (Harmony and other mines) make announcements on job losses within the next few weeks,” Baleni said. “I expect they’ll do whatever they want before we start negotiations (over wages) as that will already put us in a weaker position once negotiations start.”

The Chamber of Mines and the unions earlier agreed to bring forward negotiations over wages for the period post-July 2013. Baleni said the union is due to start its “prebargaining consultations” with workers in February.

Jimmy Gama, national treasurer of the Association of Mineworkers and Construction Union (Amcu), said the union’s officials at Kusasalethu were trying to schedule a meeting with Harmony’s management about the review.

“We will not comment on our view until we know what the mine’s intentions are,” Gama said. Amcu is also in the process of negotiating a recognition agreement at Kusasalethu.

- City Press

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