Harmony Gold will close the Merriespruit 1 shaft in Virginia, South Africa, at the end of the month because it is no longer profitable.
Earlier this year, the company worked out a productivity-linked deal with trade unions, allowing the shaft to continue operations provided it did not make a loss for two consecutive months and total costs remained under ZAR250,000 ($36,255).
However, Merriespruit 1 has failed to meet these conditions and closure procedures have commenced, Harmony said.
The world's fifth-largest gold producer said it would lay off betwene 270 and 1,470 workers and transfer others to its growth projects.
Harmony Gold CEO Graham Briggs said the orebody at the shaft is mined out, while cost pressures in South Africa means it is no longer viable to run.