Gold Fields to shed 600 jobs

About 600 staff of Gold Fields Ghana’s Tarkwa and Damang mines are to be laid off by next month as the mining firm battles rising costs and falling prices.

Alfred Baku, Senior Vice-President and Head of the West Africa Region, told B&FT the action is part of a restructuring strategy to streamline costs, improve efficiency and restore profits as the price of gold consistently drops.

Gold has fallen by almost a quarter this year even as miners’ costs rise and communities and government demand more benefits from the industry. According to the Ghana Chamber of Mines, the cash cost of gold production went up 25% from US$768 per ounce in the first half of 2012 to US$962 per ounce in the same period in 2013.

Gold Fields currently employs about 4,200 staff at both the Tarkwa and Damang mines in the Western Region, and the job-cuts will cost the company about US$30million.

“The job-cuts will be in the region of 300 to 600 of our workforce. We want to embark on this as soon as possible. It is about looking at our productivity profile, as Tarkwa mine’s productivity has dropped in recent times,” Mr. Baku said.

“Ongoing price volatility and steadily rising costs create intense pressure for us to continuously improve our efficiency and effectiveness to ensure that our operations are profitable and sustainable. We are committed to treating people fairly throughout this process.”

Gold Fields has been operating in the country since 1993 and this is the first time that job restructuring at the company is being discussed.

“It is rather unfortunate, but if we don’t do anything at all with the current low gold price, the entire mine will collapse. It will be better to lose 20% than all the 100%,” Mr. Baku said.

The mine’s job-cutting strategy has necessitated various discussions and negotiations between workers and top management personnel to agree compensation and severance packages.

“The severance package will ensure the workers take a reasonable amount home to invest in profitable ventures that will enable them to continue making a living,” Mr. Baku said.

Gold Fields Ghana is the third major mining company in the country to lay-off staff this year. Mining giant AngloGold Ashanti’s (AGA) Obuasi mine announced imminent job-cuts of approximately 430 of its miners, and Newmont Ghana -- the second major miner in the country, is also terminating the employment of 300 of its workers.

Other miners are contemplating a similar strategy because the difficult times and operational challenges confronting the industry are curtailing their production targets.

Globally, the world’s biggest mining companies are cutting costs, selling assets and scrapping expansion plans to counter lower prices and sustain operations.