Gold Fields to cut 1,100 jobs at South African unit
Staff Writer |
Gold Fields Limited announces a restructuring at its South Deep operation and provides a further trading statement relating to its H1 2018 results, due for release on Thursday, 16 August 2018.
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South Deep has had a number of operational challenges since Gold Fields acquired it in 2006.
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.
South Deep is a complex and unique mine, that has faced persistent issues.
Despite numerous interventions, the mine continues to make losses (R4bn over the past five years).
Gold Fields has invested a total of approximately R32bn (including the R22bn acquisition cost) since acquiring the mine in 2006.
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.
During Q1 2018, South Deep completed phase 2 of its organisational restructuring plan, focusing on the lower levels of the organisation, through a voluntary retrenchment programme, which resulted in 261 employees leaving the company This followed the restructuring in Q4 2017 (phase 1) at the more senior levels of the business, which comprised a 25% reduction (47 employees) in the management level.
Although this restructuring was mostly voluntary in nature, it nonetheless had a significant negative impact on morale and consequently productivity and output during H1 2018.
In addition, continued low mobile equipment reliability and productivity, the intersection of active geological features (faults and dykes) in the high-grade corridor 3 and poor ground conditions in the composites (far western part of the orebody) slowed production rates.
These challenges have resulted in an underperformance on development and destress mining and has impacted stope availability and output.
Stope availability and output has also been adversely affected as a result of slow loading and backfilling.
These challenges will not only impact the mine’s 2018 performance but the knock-on effect will carry through into 2019 and beyond. ■