Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
Doornkop mine. (Image courtesy of Harmony Gold)
South Africa’s National Union of Mineworkers (NUM) has requested the nation’s mineral resources minister to stop Harmony Gold Mining (NYSE:HMY), (JSE:HAR) from axing 3,040 positions at its Doornkop mine.
According to the union, Harmony — the country’s third-biggest gold producer— notified workers about the upcoming cuts on May 19, adding it planned to put Doornkop on “care and maintenance,” which basically means the mine will be closed, Reuters reports.
Earlier this month the company announced plans to restructure mines producing almost 25% of its bullion after making a third consecutive quarterly loss.
Wages make up about 50% of Harmony’s costs, and increasing electricity bills amid a power crisis in South Africa have been heavily weighing on the company. According to the miner, electricity makes up about 20% of its costs and Chief Executive Officer, Graham Briggs, has said he can’t afford to continue to operate at a loss.
In December, Harmony announced it was cutting jobs at another mine, Kusasalethu, to try returning the operation to a profit, as it has consistently recorded losses since September 2012. The firm expects full-cost savings at the mine to be realized in the fourth quarter, as production will ramp up.
Comments
Ramon Espinosa
Do they issue Ordanary shared direct ? Hmmmm Electricity & Labor great approach get Harmony going again