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Gold Fields Embarks On Retrenchment Exercise

  • SOURCE: | qwesa2big
  • Miners_1Gold Fields Ghana, operator of the Tarkwa and Damang mines, has described as painful its decision to retrench workers due to the hard times which have befallen the mining sector.  The mining firm has so far shed 600 workers, a figure that is likely to rise after completion of the retrenchment exercise by end of March, according to officials of the company.

    The Ghana Mineworkers Union has decried the decision and it is worried that redundancy is always considered the major option to manage financial and operational crises within the industry, challenging “the moral and ethical business conscience of mining firms using the falling gold price to create a major source of job-insecurity”.

    “When it comes to restructuring, it is a painful and sensitive thing. It is better to lay off, say, 10 percent of the work force, and still have a 10-year mine life than reassign them and run at a very high cost,” Gold Fields’ Executive Vice President (EVP) and Head of West Africa Alfred Baku told the B&FT in an interview.

    The Tarkwa operations of the company had three processing facilities, Carbon in Leach (CIL), North Heap Leach and the South Heap Leach. In Heap leach mining, the ore becomes harder as the process gets deeper — and this makes it progressively expensive.

    “For the Heap leach operations, we were running at a loss. The dollars per ounce we needed to stay in business was 1,600, but what we currently have is about 1,321; and that’s using the gold price alone,” Mr. Baku said.

    “Heap operations are generally profitable when the ore is softer; as a result of that we decided we are getting deeper and it is not profitable so we had to pull the brakes,” he added, referring to a decision that meant workers of the two units had to be sent home.

    The Mineworkers Union says between January 2013 and March 2014 it lost 3,080 members, or 16.1 percent of its membership, through retrenchment blamed on the slump in the gold price and the increasing cost of operations — which has seen mining royalties, for instance, rise from 3 to 5 percent and corporate tax from 25 to 35 percent.

    Last year, the gold price plummeted by 28 percent, having begun the year at US$1,674.3 per ounce only to end at US$1,196.70.

    Further job-cuts are expected in the industry, with Newmont Ghana saying it will terminate the employment of an additional 500 of its workforce after laying-off about 300 last year. AngloGold Ashanti’s (AGA) Obuasi Mine retrenched about 430 of its workers last year.

    Source: B & FT

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