Newmont puts lay-offs on hold

Newmont Ghana says it has temporarily put on hold its planned retrenchment of up to 600 workers by end of this month, as it complies with the directive of the National Labour Commission (NLC) to enter into mediation with the Ghana Mineworkers Union (GMWU).

“We will comply with this directive and hope to bring the issue to resolution quickly. Accordingly, our planned workforce reduction has temporarily been put on hold,” said Johan Ferreira, regional senior vice president of Newmont’s Africa operations.

Newmont Ghana, which is part of US-based Newmont Mining Corporation, announced the job-cuts in February and said it aims to readjust expenditure to match a reduced mining rate.

An earlier retrenchment in 2013 saw around 240 workers of the company’s Ahafo mine sent home.
An official statement signed by Adiki Ayitevie, Director of External Affairs and Communications of Newmont, said the company has been implementing measures to streamline production costs and improve efficiency to make the business sustainable over the long-term.

The company explained that the impending workforce reduction is largely driven by a number of factors, including the low gold price and high operational cost due to increased waste rock stripping at the Ahafo mine.

It also cited its having to align the mining rate with milling capacity at the Ahafo mine, and a significant drop in Ahafo’s gold production level due to the lower ore grade.

“It is very critical that we move forward with our other cost improvement initiatives as well as the planned workforce reduction so we can ensure the business remains sustainable and continues to create shared value for our employees, communities and the government.”

As required by law, Newmont issued a 90-day notice on the retrenchment in February to the relevant stakeholders including the union. The 90-day notice expired on 21st May without an agreement reached with the union.

The company explained that it will continue to engage key stakeholders to ensure mutual understanding of the rationale for the ongoing business improvement measures.

According to the union, however, Newmont has not built a convincing business case to further cut down its local workforce of more than 2,000.

Instead, the company’s business outlook is vibrant, the union said, adding that since January 2013, 3,080 of its members have exited the industry as companies downsize their workforce to manage a record slump in the gold price and spiralling costs.