Gold Fields gives notice of pending dismissals at South Deep

Matthew Hill

Gold Fields issued a notice of possible dismissals to most underground workers at its South Deep mine, Africa’s second- biggest producer of the metal said yesterday.

The company wanted to implement a new operating model to improve productivity at South Deep, including changing shift arrangements, it said.

South Deep, which made up 7.8 percent of the company’s attributable output last year, had the highest total cash costs of all Gold Fields’ operations last year at $1 073 (R9 000) an ounce.

The new model would enable it to create a further 400 full-time positions immediately and as many as 1 500 by the end of 2015, the company said.

Gold Fields and the National Union of Mineworkers could not reach an agreement on the proposal, with the company issuing a section 189 notice in terms of the Labour Relations Act warning of possible dismissals. Negotiations with unions had lasted “several months”, Gold Fields said.

The “worst-case scenario” would see it dismiss 2 384 underground workers, chief executive Nick Holland said on a conference call.

The company has to have as many as 60 days of mediated talks with union representatives before it can begin a retrenchment process, according to labour law.

South Deep produced 273 000 ounces of gold last year and employed about 3 500 workers.

The mine is on track to produce at a rate of 700 000 ounces a year by the end of 2015, making it Gold Fields’ second-biggest South African mine after the nearby Kloof-Driefontein complex.

“If they want a strike we will give one to them,” Lesiba Seshoka, the union’s spokesman, said by phone from Johannesburg.

“That’s not what we want now,” he said.

Workers embarked on a nine-day strike at South Deep in November 2010 to demand more black managers at the company.

The Gold Fields share price closed 1.73 percent higher at R109 yesterday. – Bloomberg