Obuasi mine to cut 430 jobs

Approximately 430 miners at AngloGold Ashanti’s (AGA) Obuasi mine are expected to lose their jobs over the next three months as part of the mine’s broader revival strategy.

Once the biggest gold mine in the country and the leading employer in the industry -- with about 8,500 workers -- Obuasi has in recent years become a high-cost producer, and not produced above 400,000 ounces since 2004.

The mine has been struggling with overage equipment, poor security, inadequate power supply, and the activities of illegal miners.

Making a presentation in Obuasi under the theme “Renewing the Obuasi Mine: Managing Challenges through Innovation and Best Practices”, AGA Ghana’s new Senior Vice President Mark Morcombe said the retrenchment process will be undertaken in accordance with the company’s values, the collective agreement, and legislation -- adding that all possible assistance will be provided to those affected.

“Extensive engagement and consultation is underway with the union, the workforce, the Government, and with the community.”

Mr. Morcombe said an exercise has been completed to understand the labour structure required for the mine. “In the short-term, we intend to right-size the operation; and in the medium-term, to transition the operation to a modern, productive mine,” he said.

“The transition to mechanisation will, regrettably, also result in a phased process of retrenchments over the next two years due to a combination of the decline in gold price, increased overall labour cost, and the increase in other input costs such as power and materials.

“AngloGold Ashanti is mindful of the impact this process will have, though it remains necessary to create a sustainable operation that is able to sustain high-quality jobs and support the economy for decades to come.”

Obuasi’s production has been in continuous decline since 1995 in terms of total ounces from ope- pit sources, and since 1998 from underground ounces. The mine’s performance has not met merger expectations since 2004. The 25 percent fall in gold prices this year poses a further threat to the mine going forward, company officials said.

Last year, AGA undertook an extensive review of the mine, which Mr. Morcombe said is intended to modenise the infrastructure and reverse rising costs and low production.

“Work on establishing this new infrastructure is underway and is the necessary first-step toward mechanising many of the mining development and production processes. This programme is crucial to ensuring not only that Obuasi makes an appropriate contribution to AngloGold Ashanti, but that it will also re-establish its vital role in the local, regional and national economy.”

The mechanisation of the mine, he said, will require that both AGA and contractor staff be retrained to operate new equipment, and in more productive and efficient work practices.

The key enabler for this will be the introduction of an underground mining contractor with the requisite work methodology, equipment, staff and approach to training and multi-skilling. A key requirement of this work will be the transfer of skills to the local workforce, Mr. Morcombe said.  

AGA’s strategic plan for Obuasi is to invest approximately US$200million this year in the mine, which is still worth more than 20 years of mine-life and has some nine million ounces of gold reserves.