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Gold Fields may lay off 2 384 South Deep workers, NUM threatens strike
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2nd August 2012
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JOHANNESBURG ( – South African miner Gold Fields has notified 2 384 underground workers at its South Deep mine of possible retrenchments, after it failed to reach an agreement with the National Union of Mineworkers (NUM) on a new operating model.

The JSE- and NYSE-listed mining group said on Thursday it had issued a 60-day Section 189 notice to NUM, which represents 74% of South Deep’s employees.

The company reached an agreement with trade union Uasa, representing 13% of the South Deep workforce, on the proposed operating model, which defined strategic choices on labour productivity, equipment and maintenance, mine design, and infrastructure to improve productivity and performance of the mine.

CEO Nick Holland stated that the company was not aiming to put jobs at risk with the operating model. “We are aiming to create [jobs] in an industry that does not create jobs at the moment,” he said in a conference call.

The model, which had been under negotiation with unions and employees who are not members of a recognised trade union, would create 400 new full-time positions in the immediate short term.

Holland added that the number of new jobs would increase from its current level of about 3 500 to about 5 000 once South Deep was in full production.

Gold Fields proposed six changes to implement the model at South Deep. This comprised the changing of the shift arrangements to allow for 3.5 hours more face time a day to achieve improved production results and provide employees with 43 more days off per year; introducing a new total rewards system, which appropriately incentivises employees who meet and exceed their targets safely; adjusting the grading system to bring it into line with the rest of the mining industry; achieving greater mining flexibility through selective outsourcing arrangements; providing for improved maintenance through working arrangements with original-equipment manufacturers' and aligning policies and procedures to Gold Fields' best practice.

NUM spokesperson Lesiba Seshoka told Mining Weekly Online that the union was under no obligation to accept the model, particularly as it held no advantage to its members. “They are offering us more days off, but less money to take home, which is problematic as everyone has a budget to adhere to.”

Asked what the union’s next step would be, Seshoka said: “We are going to strike. We will talk to our members at South Deep, Driefontein and all other operations to make sure that we bring them in line. Gold Fields is out of order now, they have grown too big for their boots. An injury to one is an injury to all, that is why we will disrupt all operations,” he said.

But a Gold Fields spokesperson said that the offer would minimise the financial impact on employees affected by the proposed changes.

"We offered to retain existing salaries for employees who would work according to the new shift arrangement or have their job grade changed. It also offered a lump-sum payout for employees whose legacy market allowances would be replaced with a new incentive scheme – bearing in mind that this new system would give employees the opportunity to earn significantly more than they currently do through an uncapped bonus system linked to performance.

“At the moment, an employee who has performed very well is not rewarded appropriately and is paid the same bonus amount as an employee who puts no effort in,” the spokesperson said.

Gold Fields sees South Deep as an important and strategic growth asset, with reserves to run beyond 2070.

Holland said that the company did not expect these issues to affect its 2015 production target. Gold Fields is aiming to produce 700 000 oz of gold a year by the end of 2015.

Edited by: Mariaan Webb


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