JOHANNESBURG (miningweekly.com) – South African gold major Harmony Gold has agreed a productivity-linked deal with trade unions, which will limit job losses at its Virginia operations to under 1 000.

Last month, Harmony announced that it would close three lossmaking shafts in Virginia, in Free State province, which would put the jobs of 3 700 employees at risk.

But the gold miner has now agreed to keep certain sections of the Merriespruit 1 shaft open, provided that these sections do not make a loss for two consecutive months.

The shaft's total costs would also have to remain under R250 000/kg, Harmony said.

"All parties recognise that, to achieve the desired result – keeping one of the shafts operational and containing job losses to fewer than 1 000 – the agreed cost and profitability targets must be achieved through improved productivity," commented CEO Graham Briggs.

At the time of the announcement that it would close the three Free State shafts, which have been in operation for nearly 60 years, Briggs had said that "every effort" would be made to mitigate the effects of the closure on the 3 700 employees affected.

The company has since met with trade unions under the auspices of the Commission of Conciliation, Mediation and Arbitration.

"The innovative agreement announced today, resulted from the process of engagement, and points to the excellent relationship between management and trade unions in the Free State," Briggs commented.

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