South Africa’s Harmony Gold Mining Company has announced it will temporarily close its loss-making Target 3 shaft, putting around 1,500 jobs at risk.

Harmony Gold Mining said in a statement: "Despite numerous initiatives by both management and organised labour to return Target 3 to profitability, this operation has continued to record cash flow losses.

"Given the current gold price environment, and the significant capital investment required to sustain operations at this shaft, Target 3 is predicted to continue to make a loss in the foreseeable future."

In the last four to five years, the company has recorded a loss of around ZAR260m ($24.5m).

The temporary halting will affect both employees and contractors working at the mine.

However, the company assured it was taking measures, such as offering voluntary separation packages, early retirements, transferring employees to other operations, and re-skilling employees for redeployment into other jobs within the company to prevent job losses.

"Target 3 is predicted to continue to make a loss in the foreseeable future."

The company said: "Additional development and equipping is required to access the targeted South Block to sustain operations at Target 3 and, in particular, the build-up in Basal reef stopping.

"While the targeted South Block remains a valuable resource, the shaft will be placed on care and maintenance once the requirements of a section 189 process have been fulfilled."

The company has already initiated talks with the South African Department of Mineral Resources, the Matjhabeng Local Municipality and the Free State provincial government regarding the issue.

Harmony Gold Mining CEO Graham Briggs said: "In developing our safe and realistic operational plans for FY15, we were informed by the need to improve our margins, carefully assessing the ability of each of our assets to be profitable at current gold prices."

In the 2014 fiscal year, the company produced 1.17 million ounces of gold and expects to produce around 1.2 million ounces of gold in the 2015 fiscal year.