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Village Main Reef postpones potential job cuts until lockdown ends

29th April 2020

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JOHANNESBURG – South African gold miner Village Main Reef, which planned a turnaround of its operations that could lead to job cuts, said on Wednesday it had agreed to postpone the retrenchment process until after the nationwide coronavirus lockdown.

The unlisted miner, controlled by China-based parent company Heaven Sent Gold, said it met with the mines minister earlier in April and agreed that the process would be halted until after the lockdown.

The National Union of Mineworkers (NUM), its majority union said last week up to 6,309 workers could lose their jobs at its Tau Lekoa mine, Kopanang mine and West Gold Plant.

"We were just starting to see positive signs of improvement in March, when unfortunately, the turnaround strategy was abruptly interrupted by the outbreak of Covid-19 in South Africa and the subsequent Lockdown (and its extension)," said Village Main Reef Chief Executive Officer Jeff Dong.

Job cuts are a politically sensitive issue in South Africa, where unemployment stands at around 29%. The mining sector employs around 450 000 people, according to 2019 figures from the Mineral Council industry body.

South Africa imposed a strict 21-day lockdown on March 27, which was extended until May, to stop the spread of the new coronavirus, forcing most mines to temporarily shut down.

However, mindful of the economic damage caused by the shutdown of the sector, the government on April 16 said it would allow mines to start up again at up to 50% capacity.

Edited by Reuters

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