Mineral Resources Minister Gwede Mantashe

JOHANNESBURG - Gold Fields on Tuesday moved to downplay criticism of its retrenchment plan by Mineral Resources Minister Gwede Mantashe, and said that the impending job loses were being carried out as a last resort.

"The company understands, and is sensitive to, the impact on families and communities of job losses due to the restructuring. That is why the retrenchments currently being carried out were the last resort following many interventions over a long period of time," Gold Fields said in a statement.

"The total number of 1,082 employees and 420 contractors was considerably lower than would have been the case had it not been for additional cost savings totalling around R500 million and other initiatives instituted by the South Deep management team in recent months."

On Monday, Mantashe said that Gold Fields was not acting in good faith as it embarks on a massive retrenchment process at its South Deep mine and that he was dissatisfied with the company's response to the retrenchments following his meeting with national leaders of the National Union of Mineworkers (NUM) and senior Gold Fields leaders, including chief executive Nick Holland.

On November 2, workers affiliated to the NUM embarked on a strike against retrenchments as Gold Fields wants to retrench an estimated 1,100 employees and 400 contractors at its South Deep mine in Gauteng following continued losses for five years.

"We don’t believe the company is acting in good faith. They have merely engaged in a tick-box exercise for compliance purposes. This is a disturbing approach, and we remain unhappy with the way the process has unfolded thus far," Mantashe said.

"We continue to urge employers in the sector to be responsible, as we are dealing with people’s lives when we talk of possible retrenchments, and not mere numbers."

South Deep, a R32 billion investment in South Africa by Gold Fields so far, had been losing more than R100 million a month prior to the restructuring.

The miner said the current restructuring was a necessary basis for securing the future of the mine and the remaining 3,500 jobs. Gold Fields said it believed that it has acted in utmost good faith through these difficult months following extensive consultations with the NUM and other stakeholders.

"The company has not been able to accede to further requests to reduce the number of retrenchments. However, the company recently engaged with the NUM on a proposed settlement agreement aimed at resolving the strike. This included an increase in the severance payments to retrenched employees by an extra four weeks’ pay in addition to the retrenchments package they have already received," it said.

"Retrenched employees will also be able to access funding in excess of R10 million set aside for portable skills training and would be considered for preferential re-employment should positions become available over the next 12 months at senior levels and 24 months at junior levels."

Gold Fields said it has offered to spread the no-work-no-pay losses for workers currently on strike on their salary over a four months’ period instead of deducting it in one month.

To date employees have lost an estimated R70 million in wages as the mine has not been able to produce since the commencement of the strike, resulting in a cash burn of around R6 million per day, which could further undermine South Deep’s viability. 

Gold Fields has guided the market on no further gold production from South Deep for the remainder of the year.

- African News Agency (ANA)