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Issue 20 of 38 Next Issue | Previous Issue | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
January 2009
 
INDUSTRY FACE JOB LOSSES

Following the November announcement of DRD Gold’s intention to place East Rand Propriety Mine’s (ERPM) underground workings on care and maintenance – a development that puts the future of the mine’s 1 700 workers in question – two other mining houses have made similar announcements. 

The world’s third largest platinum producer, Lonmin, advised its employees and representative unions at the end of November that, in response to the drop in platinum prices and the international credit crisis, it had commenced a process that may lead to job losses at its Marikana operations. 

The consumption of platinum largely depends on the manufacture and sale of new vehicles, since about 54% of by announcing that we will close those portions of our operations that are uneconomic,” Ian Farmer, chief executive, said in a statement to the JSE, in which it was announced that Lonmin would suspend opencast mining at Marikana by 31 December 2008

As many as 4 000 permanent Lonmin employees may be affected by these developments. In terms of the South African Labour Relations Act, Lonmin has forwarded a Section 189(a) notice to the respective offices of the trade unions. 

According to this notice, 4 000 employees, including 3 000 at Western Platinum Ltd and 1 000 at Eastern Platinum Ltd could loss their jobs. 

The trade union Solidarity says Lonmin is proposing only the minimum severance pay of one week’s salary for every year of service. 

“The planned retrenchments are expected to directly affect more than 15% of Lonmin’s total workforce,” says Solidarity spokesperson, Jaco Kleynhans. “The South African mining industry is facing an enormous crisis and all possible avenues need to be explored to prevent retrenchments. A larger solution is urgently to counter further ripples of the economic crisis in the industry.” 

Petra Diamonds
At the same time, Petra Diamonds, which has five producing mines in South Africa, has responded to the declining demand for diamonds by initiating an operational review at its Helam and Star fissure mines, prompting fears that more than half of its employees on both these mines might be facing retrenchment. 

Helam is located in the Swartruggens district of North West Province and the Star Diamond Mine is in Theunissen District of Free State Province. 

Petra has said that one of the possible outcomes of the review is that both mines could be replaced on care and maintenance. The company has also began the section 189(a) consultation process to discuss the future of the mine’s employees. 

Solidarity has issued a statement indicating that Petra management is considering the retrenchment of about 350 of the Helam diamond mine’s 669 employees. 

“However”, reads the statement, “Solidarity is not convinced that the operational problems of the Helam mine are reason enough for the retrenchments. According to the group’s financial reports, the mechanization process currently being implemented at Helam will already bring about a reduction in operational costs by next year, which will deliver higher productivity at the mine by 2010.” 

Employees are, however expected to be retrenched b the end of February 2009, or even earlier. Solidarity and other trade unions at Helam held the first retrenchment meeting with management on 8 December. 

Simmer & Jack
Simmer and Jack Mines Limited’s Buffelsfontein Gold Mine (BGM) has also issued a Section 189(a) notice to organized labour that will start a consultation process aimed at optimizing the business and ensuring that production targets are met. 

“We are experiencing unprecedented increase in the costs of materials required for mining and milling, and management intends to engage all stakeholders to ensure the long–term sustainability of BGM,” said Simmer and Jack Gordon Miller, chief executive. “Considerable capital has been invested since 2005 to ensure that the mine has the necessary infrastructure to produce according to it’s of life of mine plan, and in the current economic climate it is essential that all sections produce optimally. 

The optimization process is aimed at sections of the mine that need to improve their operating margins and includes number 12 shaft and smaller sections of the mine’s six other operational shafts. 

The company has stressed that failure to conclude an optimization plan could result in the retrenchment of about 500 people within the next two months. 

BGM began its background operations in 2005, creating 5 440 jobs. It six operating shaft include the high-grade Number five shaft which is in the process of being refurbished and is on track for completion in March 2009. The bulk of the mine’s underground production currently comes from the number six, seven and eight shafts. 

Urgent industry meeting
Meanwhile, the Department of Minerals and Energy convened an urgent meeting on December 1 with the Chamber of Mines, representatives of industry employers and trade unions to discuss the impact of the worldwide economic crisis on the South African mining sector. 

The outcome of this meeting was an agreement to set up a task team, comprising stakeholder representatives that will attempt to identify solutions to avoid impending job losses. This task team has been given three weeks to come up with recommendations.

 

ANGLO AMERICAN SA MAKES THE BIGGEST IMPACT IN CSI

Anglo American South Africa has been voted by non-profit organisation as the company contributing most effectively towards community development in South Africa for the eight year running. 

The rating released, released by cape Town-based analytical, Trialogue, is published in its annual CSI Handbook and is based on a perceptions rating of 100 leaders of South Africa non-profit organisations. 

Anglo American SA is also rated as the mining company making the most effective contribution to development by 102 private sector corporate social investment (CSI) practitioners in South Africa

“Being recognized for excellence in our CSI activities eight years in a row for our contribution to community uplifting by leaders of non-profit organisations is particularly grafting. Anglo American view CSI as a core part of its mandate in making a real and permanent contribution to the development of South Africa and its people. I’d like to take this opportunity to extend my sincere congratulation to the Chairman’s Fund team on this fantastic achievement and encourage them to continue the excellent work”’ says Kuseni Dlamini, head of Anglo American South Africa and Chairman of the Anglo American Chairman’s Fund. 

Anglo American invested R288.5-million in CSI activity in 2007, making it South Africa’s largest investor in this type of work. Most of these take place through the Anglo American Chairman’s Fund (R69-million), established in 1959. 

The Anglo American Chairman’s Fund operates as an independent fund with its own board of trustees, and undertakes sustained community interventions over an extended period of time to create an environment in which ordinary people are able to assume greater control of their lives. 

While interventions in education and health form the largest proportion in Anglo American’s CSI effort, substantial funding is also made in the fields of welfare, entrepreneurial development and the environment. Anglo American’s CSI activities are not confined to geographical areas in which the company operates, but take place in best practice partnerships, throughout South Africa

  

UNDERGROUND OPERATIONS STOP AT 115 YEAR OLD ERPM

In November DRDGold announced its intention to place East Rand Proprietary Mine’s (ERPM) underground workings on care and maintenance and to proceed with a consultation process in terms of Section 189A of the labour Relations Act, to determine the future of the mine’s 1 700 employees. 

Underground mining at the ERPM mine was halted on 31 October, when the pumping infrastructure water levels at the South West Vertical Shaft. Surface mining is, however, continuing. 

Management has informed unions that an investigation into the possibility of installing additional pumping infrastructure would comprise a capital cost of R115-million and a timeframe of more than 12 months. 

This capital cost, coupled with the cost maintaining the workforce on full pay, is beyond means of ERPM, which incurred a loss of R128.1-million after accounting for impairment of assets for the quarter ended 30 September 2008 and a loss of R102.7-million before tax in the financial year ended 30 June 2008

Following DRD’s announcement, about 2 000 workers and supporters marched on the Boksburg offices of the Department and Labour with a memorandum of their grievances, while the National Union of Mineworkers (NUM) has indicated that if DRD closes the mine, it will consider further action, including a strike. 

Production at ERPM’s underground operations dropped to just below 11 000 ounces in the September quarter from nearly 18 000 ounces for the same period a year ago. ERPM’s underground mine produced 10 899 ounces of gold, or 15% of the company’s output, in the quarter to September compared to 17 684 ounces in the same period a year ago. Its cash operating loss grew to R17-million. 

The closure of underground operations will have consequences for water levels in the area, since ERPM was pumping out about 60 megalitres of highly acidic water a day. Water Affairs and Forestry Department water quality manager, Marius Keet, has said that the water level is expected to rise to 500 to 600 metres below the surface and that the mine is considering building a new pumping station. He stresses that there is no immediate danger and that a government task team will meet soon to discuss the issue in detail. 

Discovery of gold
Gold was discovered on the East rand, within the Witwatersrand Basin, in 1886 and ERPM was established seven years later, in 1893. Until recently, it was the world’s deepest mine, at 3 585 m. 

Over its lifetime, the mine has produced more than 1 472 tons of gold (equivalent to 52-million ounces) from more than 50 shafts.

 

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