After agonisingly long consultations with government, the troubled platinum company, Anglo American Platinum (Amplats), lowered the number of employees that it planned to retrench to 6 000 from the controversial 14 000, and at the same time announced that it would compress its Rustenburg operations into three and divest from its loss-making Union mine.

While Amplats CEO Chris Griffith was spelling out these measures, which are designed to save R3.8-billion a year by 2015, Gold Fields CEO Nick Holland said the industry was doomed if “crazy” above-inflation and productivity-bereft wage increases continued in the upcoming round of wage talks.

Gold Fields CFO Paul Schmidt added that, without the necessary restructuring of the South African mining industry, many more mining companies would be forced to emulate what Amplats was planning.

“We can’t continue giving double-digit increases when productivity is declining. That’s not sustainable,” he said in response to Mining Weekly questions.

The South African mining industry needed to devise a strategy that gave the employees more pay while simultaneously boosting company productivity and providing more taxes for the fiscus.

“What Amplats has done will have to be replicated by other mining companies until nobody’s left standing,” Schmidt warned.

The industry needed to get around the same table to work out a solution, which needed to include reskilling programmes for employees that were surplus to current requirements.

Trying to divvy up different pieces of a shrinking pie left only winners and losers and companies could not continue to suffer losses.

Productivity had declined over ten years while wages had increased.

“If we can’t increase productivity, it’s all an exercise in futility. All we’ll be doing is hastening the end of the game,” Holland added.

Both Holland and Schmidt were speaking at a media round-table arranged to coincide with the release of Gold Fields first-quarter results, which saw net earnings of the 9 000-employee, 125-year-old gold major decline by R140-million to R236-million in the three months to March 31, from R376-million in the December 2012 quarter and R381-million in the March 2012 quarter.

Failure is not an option. Government, business and labour have to get around the table to create sustainable platinum mining and gold mining.

Gold Fields has fallen from being the world’s seventh-largest gold mining company to being the world’s eleventh- largest following the unbundling of its deep, mature mines into Sibanye Gold.

To watch a video on Holland’s comments, go to www.miningweekly.com and click on ‘Multimedia’ and then on ‘Video Clips’.