Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
South African miner Gold Fields’ (NYSE, JSE:GFI) planned job cuts at its massive, but struggling South Deep mine is really the company’s “last-gasp measure”, Chief Executive Officer Nick Holland said on Wednesday.
The Johannesburg-based firm revealed Tuesday its intention to axe about 1,560 jobs between employees and contractors to reduce activity and lower costs at the mine — its only one left in South Africa.
Gold Fields cited mounting losses and regular failure to meet mining and production targets among the reasons for the massive lay-offs.
Gold Fields cited mounting losses and regular failure to meet mining and production targets among the reasons for the move, which could see a third of its labour force gone.
“In the past 12 years, shareholders have received no return at all on their initial investment of 22 billion rand, having seen only an outflow of funds,” Holland wrote in an opinion piece for the Business Day newspaper.
“Every effort has been made to avoid these significant measures, including retrenching 25% of managerial employees late in 2017; approving voluntary retrenchments for employees in the lower A, B, and C bands over the past few years and bringing in Australian and Canadian experts to assist with new mining methodology,” he said.
Holland said the company was aware that the reasons for the layoffs were no consolation to those who will lose jobs. However, he added, the choice was between the announced measures and serious risk to the future of South Deep and its many stakeholders.
Comments
Karin Hall
Good move.