Mining company Gold Fields said on Friday that its production guidance for the year will decline significantly, down to 4 800kg. File Image: IOL

JOHANNESBURG - Mining company Gold Fields said on Friday that its production guidance for the year will decline significantly, down to 4 800kg or 154 600 ounces, as a result of ongoing challenges, as well as the strike and go-slow at its South Deep operations.

Gold Fields, one of the world's largest gold mining firms, has started a retrenchment process that will affect 1 102 permanent employees and 460 contractors following restructuring at South Deep operations. 

South Deep employed 3 614 full-time employees and 2 214 contractors prior to the retrenchment process. 

The company proposed to suspend mining activities in loss making areas of the mine in August and reduce operational and support staff commensurately, as well as suspend development activities in the New Mine area. 

As a result of retrenchments, the National Union of Mineworkers (NUM) has embarked on protected industrial action at the mine even though the 'no-work, no-pay' principle will apply. 

The NUM is calling on the company to reconsider its decision, find an amicable solution that will benefit both parties and for the department of mineral resources to intervene.

On Friday, chief executive Nick Holland said the restructuring process had resulted in low morale in the workforce and uncertainty about job security and had a negative impact on productivity at South Deep as the mine produced only 1 539kg, or 50 000 ounces, during the third quarter of this year.

Holland said the third quarter was characterised by the international assets posting another strong operating performance and South Deep was negatively impacted by the restructuring announced in August.

"Taking into consideration the challenges we have been facing at South Deep, including as a result of the strike and go-slow post the announcement of the restructuring and assuming that the strike continues until the end of the year with the consequence of no further production from November month onwards at South Deep, gold production for the year is currently estimated to be 4 800kg, or 154 600 ounces," Holland said.

"The international operations, including our 45 percent share of Asanko, are expected to produce 1.85 million attributable ounces, compared with original guidance of 1.75 million attributable ounces. This includes 45 000 attributable ounces from Asanko for five months."

The group's gold production guidance has been fluctuating throughout the year. It was said to be on track in August after following its revision down from 10 000kg or 321 000 ounces, to 7 600kg or 244 000 ounces, after the first quarter in April as result of the lower production outlook at South Deep.

- African News Agency (ANA)