South Africa’s National Union of Mineworkers (NUM) has launched a strike at Gold Fields’ South Deep operation to protest against the company’s plan to cut around 1,100 jobs at the mine.
The proposed cuts will make a third of the total workforce redundant. Around 80% of the workers at the mine are members of NUM.
Gold Fields expects the strike to undermine production and is considering temporarily halting operations if necessary.
The company decided to enforce the job cuts as part of a restructuring initiative announced in August this year to cut South Deep’s cash losses and consolidate existing operations.
At the time of commencement of the Section 189 process, which allows companies to downsize their workforce for operational requirements, the mine had 3,614 full-time employees and 1,940 contractors.
During the engagement with the trade unions, NUM and UASA, Gold Fields made an offer of voluntary severance packages, which was accepted by 177 employees.
Following the engagement process, the company has issued retrenchment letters to the 1,100 employees last week.
Apart from these, the company has also decided to axe around 420 contract staff.
Gold Fields CEO Nick Holland said: “The restructuring will help to reduce the risk of continuing operating losses and consolidates the current mining operations as a first step to building a sustainable, long-term operation. Unfortunately, the retrenchments and the reduction in contractor numbers have become essential to ensure this and save the remaining 3,500 jobs.
“South Deep has a substantial and well-understood ore body and we believe that we can bring this into profitable production over the next few years which will benefit all stakeholders, including the Westonaria communities and the South African government.”
The mine, which was acquired in 2006, has consistently failed to meet mining and production targets, according to the company.
Gold Fields has been engaged in shifting to a modern, bulk, mechanised mining approach at its South Deep operation. Considering the challenges involved and the continuing cash losses, the company decided to realign the cost structure with the lower level of production.