UBS joins Goldman in forecasting gold’s rally isn’t over
Gold will rally to $2,900 an ounce by the end of next year, according to UBS Group AG.
South Africa’s AngloGold Ashanti (JSE:ANG) (NYSE:AU), the world’s third-biggest producer of the precious metal, is cutting as many as 2,000 jobs at its domestic operations as part a restructuring aimed at reducing losses.
The company, which is down to the Mponeng underground gold mine and a tailings treatment operation in its home country, said the measure would affect employees across the different categories and levels, including the region’s executive committee and senior management.
After suffering heavy losses in South Africa, the Johannesburg-based miner said last year it would restructure its local mines, which could lead to 8,500 workers, or around 30% of its workforce, being laid off.
The company’s remaining South African assets are the Mponeng underground gold mine, and a surface operation.
Some of those job cuts were averted through the sale of its Moab Khotsong mine, as well as the Kopanang Mine and the West Gold Plant, both of which were bought for fellow miner Harmony Gold.
Currently, the company still employs about 8,200 people in South Africa, where miners face falling grades, rising costs and declining labour productivity, coupled with an uncertain regulatory environment.
The Association of Mineworkers and Construction Union (AMCU) said in the notice given by AngloGold, the miner cited “uncontrollable factors” such as ore body depletion, increasing depths to mine, lower grades, declining production, mounting electricity and labour costs and increased cost of borrowing capital, as the reasons for the retrenchments.
“We will not allow our members to be robbed of their livelihoods by the sheer pursuit of profit over people,” the AMCU said in a statement.
The National Union of Mineworkers (NUM), in turn, called all trade unions to form a united front to save jobs in the mining sector.
South Africa’s gold industry now employs fewer than 117,000 people from 180,000 in 2004. According to the latest data from GFMS, released in early May, the country is in eighth place in global gold production rankings, barely higher than Mexico. It is also the most expensive place by far to mine gold, given that after 140 years of mining, the operations have become older, deeper and more dangerous.
Comments
Karin Hall
South Afrika is on a self imposed Zimbabwe style doomsday loop. Nothing is going to stop this train wreck and it’s time to get out.