JOHANNESBURG (Mineweb.com) -- Harmony Gold, the largest miner of South African gold, this weekend settled a bubbling dispute with the National Union of Mineworkers (NUM), after the two reached an agreement which the NUM said could save as many as 9,000 jobs.
Harmony reached an in-principle agreement with the union in May, aimed at staving off job losses by introducing continuous operations (Conops) at its lower grade, marginal mines. The mines are under pressure from a strong rand, which has lowered rand revenues.
Despite the May agreement, tension between the company and the union has simmered as the likelihood of job losses has grown. Harmony has already closed three shafts and is reviewing the viability of another four, which employ between 5,000 and 7,000 people.
On Friday, however, the two parties signed the agreement which signals a new truce and attempt at co-operations between the two. Ferdi Dippenaar, Harmony’s marketing director, said the deal allowed the company to deal with the changing gold price environment. The rand-denominated price of gold has dipped from as high as R120,000/kg in 2002, to a nadir of about R78,000/kg, placing nearly two-thirds of all South African gold mines in the red. In the meantime, inflation has continued to rise, butchering operating margins and putting tens of thousands of jobs at risk. In May, when Harmony first sounded the alarm, the gold price was around R85,000/kg.
Dippenaar said yesterday that five principles had been agreed on: the introduction of Conops; the retraining of workers; voluntary retrenchment for workers; the identification of points of growth and declines; and an effort to determine how surplus labour would be redeployed.
The cornerstone of the agreement is Conops, which will make the mines more efficient. Used on the better quality mines, Harmony hopes Conops will absorb labour from the operations that are to be closed or scaled down. The plan is for any other excess labour to be dealt with through the voluntary retrenchment programme.
Dippenaar would not elaborate on the cost of the retrenchment programme, but he said the company would make a provision for the labour rationalisation in its accounts at its quarterly results presentation next month. He would not say how much would be set aside.
The union said it would meet with Harmony early next month to “discuss the feasibility of the new vehicle”.
“This envisaged structure will integrate within itself both the growth points and declining ones, including current shafts that the company intended to mothball. This vehicle will seek to ensure that there is a correct mix of shafts, operated on the old Harmony model, to ascertain that complexes complement each other,” the NUM said in a statement.
Gwede Mantashe, the general secretary of the NUM, said: “The fact that we ensured that the shafts are not closed augurs well for our goal to save jobs. What’s more important is the agreement on the new vehicle that will integrate marginal and profitable shafts, because that will also create new opportunities.”
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