JOHANNESBURG – Gold Fields’ plan to potentially cut up to almost 1,600 jobs at its struggling South Deep mine in South Africa is a “last-gasp measure”, Chief Executive Nick Holland said on Wednesday.
The company made the announcement on Tuesday, citing mounting losses and a “consistent failure to meet mining and production targets” among the reasons for the move that could see a third of its labour force trimmed.
“The choice is between this and serious risk to the future of South Deep and its many shareholders,” Holland wrote in an article for the Business Day newspaper.
“In the past 12 years, shareholders have received no return at all on their initial investment of R22 billion, having seen only an outflow of funds,” Holland said of South Deep.
The mine west of Johannesburg employs around 3,600 full-time workers and 1,900 contractors. In Tuesday’s announcement, the company said 1,100 permanent employees and 460 contractors could “potentially be impacted by the proposed restructuring”.
South Deep is Gold Fields’ last South African asset and has been beset by problems as the company has tried to mechanise the operation in the face of challenging geology 3km (2 miles) below the surface.