[miningmx.com] — RISING costs at DRDGold’s Blyvooruitzicht gold mine may lead to the loss of some 12% of its total 4,300 permanent workforce, according to the company which said in an announcement today it had opened a 60-day consultation period with unions.
Blyvoor, DRDGold’s west Rand mine, is the last of its underground assets and has struggled over the years to contain costs and impose efficiencies. The group fully wrote down the mine in its 2011 financial year and more recently imposed a rescue plan after failing to use the operation as a vanguard for consolidating other marginal gold mining assets in South Africa.
The process DRDGold today kicked off could result in the retrenchment or voluntary separation with 500 workers despite attempting to lower costs 30%. Some cost lowering measures included a reduction in overtime expenditure; a 10% reduction in departmental costs and a granular assessment of the 4 and 6 shafts.
Not even the record rand gold price would be enough to save these jobs, according to James Duncan, spokesman for DRDGold.
“We don’t run these mines on what the gold price is doing or the rand, but in respect of the things over which we have control,” he said. The rand gold price is roughly 414,000 per kilogram, which is some 25% more than the 308,000/kg DRDGold averaged in its 2011 financial year.
DRDGold has its work cut out for it, however, if it decides to press ahead with any retrenchments after the National Union of Mineworkers (NUM) expressed its opposition to any reduction in numbers.
NUM said it had learnt with shock about the planned retrenchments, and that it would “fight and nail with the errant company”, according to a report by I-Net Bridge, the newswire service.
DRDGold, which was awarded “worst employer of the year” by the Congress of South African Trade Unions in 2004, continued “to treat workers like dirt and threaten them with closure”, the newswire quoted NUM as saying.
“At a time when workers wanted increments, DRDGold later closed the East Rand Proprietary Mine whilst it had earlier closed others such as Crown,” NUM said.
“The National Union of Mineworkers calls on the Department of Mineral Resources to blacklist DRD Gold and its directors from continuing with any mining business in the republic,” the union said in a statement.
It’s been a difficult period for workers at Blyvoor. Earlier this month, five employees at Blyvoor’s 5 shaft were injured following a seismic event.
