INVESTORS AND MEDIA In the news
JSE and NYSE-listed Gold Fields says it has acted in “utmost good faith” and insists the currently planned retrenchment of 1 082 employees and 420 contractors at the South Deep mine is a last resort.
This follows after the Department of Mineral Resources (DMR) on Monday evening issued a media release, in which Mineral Resources Minister Gwede Mantashe expressed his dissatisfaction with Gold Fields’ approach to retrenchments.
“We don’t believe the company is acting in good faith. They have merely engaged in a tickbox exercise for compliance purposes. This is a disturbing approach, and we remain unhappy with the way the process has unfolded thus far,” he said, following a meeting with Gold Fields executives, including CEO Nick Holland, as well as representatives of the National Union of Mineworkers (NUM).
“The company understands, and is sensitive to, the impact on families and communities of job losses due to the restructuring. That is why the retrenchments currently being carried out were the last resort following many interventions over a long period of time,” Gold Fields said in a statement issued on Tuesday.
It added that the number of employees to be retrenched was considerably lower than what would have been the case had it not been for additional cost savings of about R500-million and other initiatives instituted by the South Deep management team in recent months.
These included a 25% reduction in the size of the management team on the mine and a series of voluntary severance packages over the past year that were accepted by about 460 employees in total, including 180 of those affected by the current retrenchments.
Gold Fields pointed out that South Deep, which represents a R32-billion investment in South Africa by the company to date, had been losing more than R100-million a month prior to the restructuring.
“The current restructuring is a necessary basis for securing the future of the mine and the remaining 3 500 jobs,” the gold miner said.
Meanwhile, the company said it had recently engaged with the NUM on a proposed settlement agreement aimed at resolving the strike at South Deep. Employees at the mine went on strike at the mine, in protest over the planned retrenchments, on November 2.
The proposed settlement agreement includes an increase in the severance payments to retrenched employees by an extra four weeks’ pay in addition to the retrenchment packages they have already received.
Retrenched employees will also be able to access funding in excess of R10-million set aside for portable skills training and would be considered for preferential re-employment should positions become available over the next 12 months at senior levels and 24 months at junior levels.
For employees currently on strike, the company has offered to spread the ‘no work, no pay’ losses on their salary over a four-month period instead of deducting it in a single month. Gold Fields estimates employees have lost about R70-million in wages since the strike started.
The union has until the end of this week to accept the proposed settlement.
The halt in production at South Deep, as a result of the strike, has resulted in a cash burn of about R6-million a day, which Gold Fields warns could further undermine the operation’s viability.