Retrenchment looms over 2,000 AngloGold employees

The gold major said it in a statement it had started a consultation process with employees and organised labour groups in terms of section 189 of the South African Labour Relations Act 66 of 1995, which refers to an employer contemplating the dismissal of employees for reasons based on operational requirements.

The talks were being facilitated by the Council for Conciliation, Mediation and Arbitration and AngloGold said the aim was to ensure the overall viability of its remaining assets in the country, while "minimising job losses to the greatest extent possible".

The Department of Mineral Resources' mining sustainability and employment committee had been notified in line with section 52 of the mineral and petroleum resources development act.

The company said the restructuring process would cut around 2,000 roles across its 8,200-employee South African business and affect employees across different categories and levels, including the region's executive committee and senior management.

The National Union of Mineworkers confirmed it had received the section 189 notice and was "shocked" that AngloGold was likely to retrench so many workers considering the country's high rate of unemployment.

"This is the same company that took a decision to retrench 849 mineworkers in January 2017 and also in June 2017 where they took a decision to retrench 8 500 mineworkers. It has become a fashionable trend for this company to retrench mineworkers", the union said.

"We, therefore, call on AngloGold to rethink its position to retrench. They must create opportunities for job creation rather maximizing profits at the expense of the poor mineworkers who earn poverty wages."

AngloGold said its South African operations were facing many challenges, including increasing depth and distance from central infrastructure, declining production profiles, and cost escalations that outpaced inflation and the gold price.

"In addition, the margins are negatively affected by a much stronger exchange rate," it said.

The company noted that the all-in sustaining costs of its South African business were $1,361 per ounce in the March quarter, which had been higher than the gold price of $1,330/oz.

"This performance emphasises the need to address our cost base to ensure it is appropriate for our much-reduced production," it said.

It added that the restructuring of the South African asset portfolio was still underway to ensure that on- and off-mine cost structures were appropriate for the size of the smaller production base.

AngloGold recently halved its South African gold production by selling the Kopanang and Moab Khotsong mines in February and announcing the closure of the TauTona mine.