Johannesburg - Pan African Resources is considering job
cuts at its Evander gold mine that would affect about 80 percent of employees
at the operation, after warning a refurbishment program could take longer
than planned and be difficult to implement successfully, according to its
biggest labour union.
Pan African notified workers on Tuesday that it could
terminate as many as 2 000 jobs, Livhuwani Mammburu, a spokesman for the union,
said by phone. The mine, which employs 2 435 workers, needs significant
improvements to prevent it being mothballed, according to a notice to employees
provided to Bloomberg by the NUM.
Pan African CEO Cobus Loots wasn’t available to respond
to a request for comment.
Pan African on Monday dropped the most in almost four
years after saying it would halt Evander’s underground mining operations
for as long as 55 days for refurbishment. The work is needed to ensure safe
operations after an employee was killed in an accident on Febuary 15, the
company said.
Read also: Sibanye starts retrenchment talks
Evander issued the official notice under South Africa labour
law, initiating 60 days for talks on potential cuts. The incident this month
has put the mine’s “future viability in serious doubt” and means that
substantial further capital spending is required, the company said in the
notice.
Care and maintenance
“Unless the mine’s operating costs are materially reduced
and the sustainability of its infrastructure is substantially enhanced through
the envisaged refurbishment, the mine will need to be placed on indefinite care
and maintenance,” it said.
The company plans to spend R40 million on the shaft
refurbishment and another R60 million thereafter, it said in the notice. “We
envisage the rehabilitation will take a minimum of two months to complete but
may be extended in the face of further engineering challenges.”
The company’s focus in the second half of its financial
year will include improving safety and compliance across all operations and
resuming underground mining at Evander, Pan African said in a presentation
Wednesday. Evander experienced a material increase in government-mandated
safety stoppage in the past 12 months, it said.
South Africa’s mining sector has been shrinking in recent
years, with almost 60 000 jobs lost between January 2012 and December 2015,
according to a presentation last year by the Chamber of Mines, a lobby group
for the industry. Sibanye Gold CEO Neal Froneman warned earlier this month that
200 000 jobs could be eliminated by 2025 if new technologies aren’t used to
extend the life of mines.