CAPE TOWN - Gold Fields has announced on Thursday that the company will let go of 1 100 jobs at its South Deep area.
This has led to the National Union of Mineworkers announcement of an impending strike.
Gold Fields said that they needed to reduce its workforce as part of its restructuring efforts “to stem South Deep’s significant cash losses and consolidate current operations”.
THE WRITING WAS ON THE WALL
Last month, Gold Fields chief executive Nick Holland, told shareholders that getting impatient over the company’s failure to stem losses at the South Deep deposit did not help and that they shouldn’t lose hope.
Gold Fields said in August that it was embarking on yet another turnaround plan at the operation, its only one left in South Africa.
South Deep’s disappointing performance has been a drag on the company for years and management is aware that investors are getting fed up, Holland said in an interview.
“They are now very impatient, and one can understand it but I think we need to calmly look where we are and evaluate the best way forward,” he said. “There is a large resource base there, it’s well-drilled and we have spent a lot on infrastructure development costs. We are not far away, we just need more time.”
South Deep is the world’s second-largest known body of gold-bearing ore but output targets have been repeatedly missed. The company has sunk more than R9 billion into the mine in addition to the R22bn it paid to buy the asset in 2006.
BUSINESS REPORT ONLINE