File image: Reuters

Labour union Uasa has vowed to fight the retrenchment of 500 workers at Blyvoor, a subsidiary of gold producer DRDGold.

“Uasa will fight tooth and nail to save the jobs of our affected members,” spokesman Andre Venter said in a statement on Wednesday.

“We are convinced that we will be able to influence the process that could see the number of employees contemplated reduced drastically.”

DRDGold said Blyvoor had been unable to meet production and financial targets, a situation exacerbated by higher utility costs.

Since June, Blyvoor gold mine had been undergoing business rescue proceedings in terms of chapter six of the new Companies Act. The business rescue practitioner would enter into a 60-day consultation process on Tuesday with the National Union of Mineworkers and Uasa, DRDGold said.

The consultation had to be done in terms of section 189 of the Labour Relations Act.

“Blyvoor is proposing voluntary separation and application of the principle of 'last in, first out' as among the mechanisms to be applied to effect the required reduction in employee numbers,” the company said.

On June 23, DRDGold said it would no longer finance Blyvoor, which needed about R80 million to keep going until the end of 2011.

DRDGold owns 74 percent of Blyvoor, south of Carletonville, in Gauteng.

Blyvoor was considering other measures to achieve a targeted 30

percent improvement in production costs to avoid job cuts. These included reducing overtime costs, reorganising shifts, reducing department costs by 10 percent and revising mining plans. - Sapa