Johannesburg - South Africa's Sibanye Gold has started talks with unions about cutting jobs at its loss-making Cooke 4 mine though the largest union in the gold sector has vowed to fight any reductions.
With unemployment running at nearly 27 percent, job cuts are often opposed by unions in Africa's most industrialised economy, which is a major concern for mining companies grappling with soaring costs and low metal prices.
The National Union of Mineworkers (NUM), which has the lion's share of membership in the gold sector, called on the mining minister to stop the “drastic action” of layoffs.
“The NUM does not want to see mineworkers being retrenched. We will engage Sibanye Gold,” it said in a statement.
The Association of Mineworkers and Construction union was not immediately available for comment.
Sibanye, which also mines platinum, first broached the subject of cuts at the mine with unions in November 2014.
Read also: Cooke 4 ‘threatens’ all Cooke mines
The company said on Monday that Cooke 4 has continued to fall short of production targets and accumulate losses since then, forcing the producer to reopen talks about jobs cuts.
The chief executive of Sibanye's gold operations, Wayne Robinson, said in a statement that the losses threatened the viability of the other three Cooke operations.
“It is unfortunate that despite the joint efforts of stakeholders, the Cooke 4 operations have been unable to meet required production and cost targets and has continued to operate at a loss,” said Robinson.
The Cooke operations, which include four mines and three processing plants, had an operating loss of R4 million ($274 000) in 2015.
Sibanye employs 1 700 permanent workers at Cooke 4 and about 7 000 workers at all four Cooke operations, Sibanye spokesman James Wellsted said.
The previous round of talks in November 2014 had led to some job cuts and a new plan to revamp the mine but the operation was still losing money, he said, adding that the mine was unlikely to run with fewer people if it was unable to pay for itself.
“I don't want to preempt the consultation process and obviously we are looking for solutions but we have not been able to improve the situation,” Wellsted said when asked whether the mine would be shut.
REUTERS