Gold Fields

file photo

Gold Fields retrenchments: South Deep mine to cut 30% of its workforce

Further downscaling in South Africa’s mining sector.

Gold Fields

file photo

Gold Fields, one of the world’s largest gold mining firms, is set to retrench up to 1 560 employees at its South Deep operation in Gauteng.

Built in 1951, South Deep is the largest gold mine in South Africa, operating on the second largest body of gold-bearing ore known to mankind. But South Deep’s glory days are swiftly slipping away, as profits dwindle and debts stack up.

South Deep financial trouble

According to Business Day, the fate of South Africa’s once wealthy mining industry rests squarely on the shoulders of South Deep. This poses a huge problem within the context of mining the nation’s mineral wealth – Gold Fields, the owners of the mine, simply can’t afford to carry operational costs any longer.

Gold Fields has spent over R30 billion on the mine in the last ten years and is still consistently missing production targets, leading the mine into a financial depression. Over the last five years, South Deep has lost R4 billion.

Simply put, it’s ‘restructure and retrench’, or close up shop. These are the only options available to Gold Fields.

Downscaling the mining sector

This restructuring process is not unique or limited to the South Deep – further north, platinum mining giants, Lonmin and Impala, are set to retrench close on 25 000 workers over the next three years, as the precious metal market shudders and splutters.

According to Gold Field management, the purchase of South Deep mine in 2006 has failed to bear positive results. Difficulties relating to mechanised operations and labour-intensive deep-level mining have left South Deep in the lurch.

In a last-ditch effort to keep South Deep operational, Gold Fields has implemented yet another restructuring process, which could see the loss of  1 560 jobs.

Business Day reports that South Deep currently employs 3,614 full-time employees and 1,940 contractors.

Unlike the platinum mining giants, Gold Fields has remained mum on other details relating to the restricting process, other than cutting-down of operations, saying:

“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.

Given the significant impact of the restructuring from late 2017 and early 2018, we are unable to quantify the impact of the proposed large-scale restructuring on production in 2019 and beyond.

Consequently, the previously guided build-up plan for the mine (released in February 2018) has a high degree of risk and uncertainty and can no longer be relied upon.”