Gold Fields revealed its plans to cut 1,560 jobs at its loss-making South Deep mine operations in Gauteng, South Africa as part of a restructuring strategy.
Image: Gold Fields to reduce workforce at South Deep mine in South Africa. Photo courtesy of kathi_gott/Freeimages.com.
The South African gold mining giant said that the South Deep mine has been plagued with several operational challenges ever since it was acquired by it about 12 years ago for R22bn ($1.52bn).
Gold Fields said: “The key challenge has been the difficulty in transitioning the mine from one run with a conventional mining mindset and practices to mining with a modern, bulk, mechanised mining approach.”
It said further that South Deep, being a complex and unique mine, has been hit with persistent issues.
The South African gold mine has consistently failed to achieve its mining and production targets, said the company. The adaption of a unique and complex mining method with long hole stoping mining at 3,000m has been another major issue faced by the miner.
It has also noted that increasing operating and overhead costs are not in line with the profile of the high-volume, medium-grade operation at the South Deep mine.
Gold Fields opined that the operation at the gold mine has excess of staff and resources intended for a much higher production rate compared to the current production. It also added that the overall labor production is considerably under industry average.
Gold Fields said that it has spent nearly R32bn ($2.2bn) on the South African gold mine since acquiring it. The mine has continued to make losses at R4bn ($280m) over the last five years, said the gold miner.
The company, in a statement, said: “Management believes that the mine can no longer sustain these cash losses and that the cost structure needs to be realigned with the current lower level of production.”
Among the redundancies indicated are nearly 1,100 permanent employees and about 460 contractors who could also be impacted by the proposed restructuring.
Currently, the South Deep mine has a workforce of over 3,600 full-time employees to go along with 1,940 contractors.