INVESTORS AND MEDIA Media releases
Johannesburg, 27 November 2018: Gold Fields Limited (Gold Fields) (JSE, NYSE: GFI) has noted the statement issued yesterday by Mineral Resources Minister Gwede Mantashe. The Minister suggested the company was carrying out the current retrenchment process at its South Deep mine in bad faith. The statement followed a meeting yesterday evening between Minister Mantashe, Department of Mineral Resource officials, national leaders of the National Union of Mineworkers (NUM) and senior Gold Fields leaders, including CEO Nick Holland.
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.
The total number of 1,082 employees and 420 contractors was considerably lower than would have been the case had it not been for additional cost savings totalling around R500m 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.
South Deep, which represents a R32bn investment in South Africa by Gold Fields so far, had been losing more than R100m 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.
It follows extensive consultations with the NUM and other stakeholders, most recently in terms of Section 189 of the Labour Relations Act. Gold Fields believe that it has acted in utmost good faith through these difficult months.
The company has not been able to accede to further requests to reduce the number of retrenchments. However, the company recently engaged with the NUM on a proposed settlement agreement aimed at resolving the strike. This included an increase in the severance payments to retrenched employees by an extra 4 weeks’ pay in addition to the retrenchments package they have already received. Retrenched employees will also be able to access funding in excess of R10m 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 4 months’ period instead of deducting it in one month.
The company has extended this offer to the end of this week and appeals to the NUM to end the strike, which will mean that employees and contractors can get back to work and earn an income.
To date employees have lost an estimated R70m in wages since the NUM branch at South Deep commenced its strike action on 2 November 2018. The Branch has also resorted to intimidation and violence to prevent the many employees who want to go back to work from doing so. It has also tried to block access to the mine for the essential services teams in defiance of a court interdict and the collective agreement between the NUM and the mine.
The mine has not been able to produce since the commencement of the strike, resulting in a cash burn of around R6m per day, which could further undermine South Deep’s viability. Gold Fields has guided the market on no further gold production from South Deep for the remainder of the year.
Gold Fields appeals to all parties to encourage a safe and orderly return to work so that the remaining jobs at South Deep remain in place, and so that the mine can realise its potential as a profitable entity that can contribute to the country and communities.
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