Mineral Resources Minister Gwede Mantashe. File Image: IOL

JOHANNESBURG - Mineral resources minister Gwede Mantashe said on Tuesday he was concerned at the decision by Gold Fields to go ahead with restructuring plans without due regard to processes spelled out in the Mineral and Petroleum Resources Development Act (MPRDA).

Gold Fields, one of the world’s largest gold mining firms, announced a restructuring at its South Deep operation which it said would result in approximately 1,560 jobs being cut.

It said notices in terms of Section 189 of the Labour Act would be served on the two unions representing workers, followed by a 60-day consultation process facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA). It said Mantashe had been informed of these developments.

Mantashe said he had met the Goldfields CEO and his executives on Monday, where he was briefed on the company’s plans and requested that it follow the processes outlined in Section 52 of the MPRDA prior to embarking on any retrenchments.

The section states that the holder of a mining right is required to give notice to the mineral resources minister “in the prescribed manner” in terms of downscaling of operations.

"We are beginning to notice a worrying trend where some mining companies do not meaningfully engage with the department on their restructuring plans, and only brief us as a mere formality or tick-box exercise," Mantashe said.

“To this end we will be initiating a follow-up meeting with the Minerals Council, to take forward our discussions when we met two weeks ago, on how we can together address investment, growth, employment and youth challenges facing the sector and economy."

"It is our view that the spirit in which Gold Fields is engaging contravenes the agreed approach and the laws governing the sector,” the minister added.

The Gold Fields news comes over a week after Impala Platinum said it would cut 13,000 over two years as part of a strategic restructuring process.

Gold Fields said South Deep had faced persistent issues including rising operating and overhead costs which were not aligned with the profile of a high-volume, medium-grade operation or with current output levels.

"Despite numerous interventions to address these challenges, including optimising the mining method, extensive training and skills development, changing shift and work configurations, and outsourcing functions, the mine continues to make losses (R4 billion over the past five years)," it said.

- African News Agency (ANA)