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Mantashe 'worried' as Gold Fields plans to retrench 1600 workers - City Press

Tuesday, 14 August 2018

Mineral Resources Minister Gwede Mantashe has slammed the decision by Gold Fields to retrench almost 1600 employees.

The mining company on Tuesday announced its restructuring plan which included the possible retrenchment of almost 1600 workers at its loss-making South Deep operation.

Mantashe said the announcement came only a day after his meeting with Gold Fields chief executive Nicholas Holland where he was briefed on the company’s plans and had requested that it should follow the processes outlined in Section 52 of the Mineral and Petroleum Resources Development Act.

“We are beginning to notice a worrying trend where some companies do not meaningfully engage with the department of mineral resources on their restructuring plans, and only brief us as a mere formality or tick-box exercise, ignoring processes outlined in the law which are binding to every mining right-holder.

“To this end we will be initiating a follow-up meeting with the Minerals Council to take forward our discussions when we met two weeks ago, on how we can together address investment, growth, employment and youth challenges facing the sector and the economy. It is our view that the spirit in which Gold Fields is engaging contravenes the agreed approach and the laws governing the sector,” said Mantashe.

In a press statement, the company said the proposed restructuring at South Deep aimed at consolidating mining activity so as to increase focus and to match the cost structure to the current level of performance since management believed that the mine could no longer sustain the cash losses.

South Deep is Gold Fields’ sole remaining mine in South Africa and the world’s second-biggest known body of gold-bearing ore. However, the mine has lost R4 billion over five years.

Gold Fields said it had spent about R32 billion on the mine since 2006.

The proposed restructuring plan could see approximately 1100 permanent employees losing their jobs and an additional 460 contractors will also be impacted.

The company currently employs 3614 full-time employees and 1940 contractors.

News of the job cuts sent Gold Fields’ shares into freefall on Tuesday, with shares falling 12% by midday on the JSE and more than R100 million wiped off its market capitalisation.

The almost 1660 expected job cuts come after another mine, Impala Platinum, announced in July that it would be cutting 13 000 staff and shutting five of its 11 shafts over 2 years.

Mining company Lonmin also recently announced its intentions to layoff 12 600 workers over three years.

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