JOHANNESBURG (Reuters) - South African gold producer Harmony Gold is in talks with unions that could see more than 3,000 jobs cut at its Doornkop mine, the National Union of Mineworkers said on Friday.
The move by Harmony, which has been battling to turn a profit across its operations in the face of depressed prices and rising costs, also comes ahead of tough wage talks in South Africa’s gold sector which are set to begin next month.
Harmony confirmed the talks had been initiated but said it was too early to say exactly what would be the end result. The company signalled in early May that it would need to undertake restructuring at the mine.
NUM spokesman Livhuwani Mammburu said the company had indicated it planned to put the mine on “care and maintenance,” which effectively means closing it.
He also said Harmony had issued what is known as a “Section 189 notice” on May 19, a legal requirement that means it will consult with unions, the government and other stakeholders for up to 90 days about the process.
“They want to lay off 3,040 workers there. The reasons given are that the mine has been making losses over the past several quarters,” Mammburu said. NUM claims almost 2,300 members at the mine. According to Harmony’s web site, the mine employs over 3,500 workers including contractors.
Harmony spokeswoman Marian van der Walt said at this early stage of the process, nothing was set in stone.
“It is premature to say that we will put it on care and maintenance because we have only commenced with the consultation process,” she said, adding that such action was one option.
“We have begun the consultation with unions to find a sustainable solution to Doornkop’s viability. It has been making losses for the past two years.”
NUM regional chairman Kanetso Matabane said the union believed the mine west of Johannesburg still had a life span of another 17 years.
In a statement, the union also called on the Minister of Mineral Resources Ngoako Ramatlhodi to intervene.
Job cuts are a thorny issue in South Africa where labour relations in the mining shafts are raw and the unemployment rate is over 26 percent.
NUM has submitted demands for wage hikes of up to around 80 percent while a rival union is seeking raises of over 100 percent for the lowest category of worker.