Mining Minister Gwede Mantashe has slammed gold producer Gold Fields over the dramatic announcement that it plans to shed over 1 500 jobs at its loss-making South Deep mine.  He has suggested the mining giant should have first engaged in proper consultation.

“South Deep has had a number of operational challenges since Gold Fields acquired it in 2006,” said the company, Tuesday.

“The key challenge has been the difficulty in transitioning the mine from one run with a conventional mining mindset and practices, to mining with a modern, bulk, mechanised mining approach. 

”South Deep is a complex and unique mine, that has faced persistent issues that need to be addressed in a holistic manner.”

Problems include rising costs, a swollen workforce, very challenging mining techniques and unreliability of equipment. 

Gold Fields said ”the mine continues to make losses (R4bn over the past five years). Gold Fields has invested a total of approximately R32bn (including the R22bn acquisition cost) since acquiring the mine in 2006.

”Management believes that the mine can no longer sustain these cash losses and that the cost structure needs to be realigned with the current lower level of production.

”Management intends to commence with consultations in terms of Section 189 of the Labour Relations Act. It is envisaged that approximately 1,100 permanent employees could potentially be impacted by the proposed restructuring. In addition, approximately 460 contractors could also potentially be impacted. South Deep currently employs 3,614 full-time employees and 1,940 contractors.

”Section 189 notices will be served on its two representative trade unions, the National Union of Mineworkers and UASA. This will be followed by a 60-day consultation process, which will be facilitated by the CCMA. The Minister of Mineral Resources has been informed of these developments.”

Mineral Resources Minister Mr Gwede Mantashe said he had ”noted with concern” the decision by Gold Fields, saying it was proceeding ”without due regard to processes in the Mineral and Petroleum Resources Development Act (MPRDA).

“We are beginning to notice a worrying trend where some mining companies do not meaningfully engage with the Department 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,” Minister Mantashe said.

“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 economy. 

”It is our view that the spirit in which Gold Fields is engaging contravenes the agreed approach and the laws governing the sector,” the Minister added.

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