JSE-listed gold miner Gold Fields on Thursday announced that it had received a notice from the National Union of Mineworkers (NUM) of the union’s intention to embark on a protected strike at its South Deep operation, in Johannesburg, to protest against planned retrenchments at the mine.
The strike is set to commence on Friday afternoon.
Gold Fields warned that about 80% of the mine’s workforce were members of the union and, should the strike proceed, it was expected to impact adversely on production during its duration.
“[The] safety of employees is paramount and, if deemed necessary, South Deep will also consider cessation of production for a limited period of time,” the company said.
Gold Fields in August commenced a Section 189 process, which is the retrenchment process under the Labour Relations Act, with the mine’s two registered trade unions, the NUM and Uasa.
This was part of a wide-ranging restructuring announcement to stem South Deep’s significant cash losses and consolidate current operations, the company said.
“We have reached a critical stage in the restructuring at South Deep, which follows on previous unsuccessful initiatives to improve productivity,” said Gold Fields CEO Nick Holland.
“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 orebody 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,” Holland added.
Consultations, under the auspices of the Commission for Conciliation, Mediation and Arbitration, with the branch leadership of the two unions have been extensive, with various options explored to improve the sustainability of the mine and limit job losses. This included an offer of voluntary severance packages, which was taken up by 177 employees.
Despite these efforts, South Deep still has to reduce its workforce by about 1 100 staff members and retrenchment letters were sent to these employees on October 31.
The mine will also reduce the number of contractors by about 420 people.
The selection criteria used to determine which employees would be affected were part of the Section 189 consultations and included length of service, performance and competency criteria and attendance records.
Prior to the commencement of the Section 189 process, South Deep employed 3 614 full-time employees and 2 214 contractors.
The ‘no work, no pay’ principle would apply for the duration of the strike, Gold Fields added.
“We respect the laws that allow for a peaceful, legal strike, but we are very concerned about the further impact that industrial action will have on the mine, and on our employees, with potentially more job losses,” Holland said.
Gold Fields will announce South Deep’s latest production performance as part of the group’s third-quarter 2018 operational update to be released on November 9.