AngloGold Ashanti is in talks with unions to lay off more than 800 workers at its South African operations, a document obtained by Reuters showed on Thursday, after years of declines in output in the country due to regulatory issues.
Africa’s biggest gold producer employs about 25,000 people in South Africa, whose vast resources are accompanied by the risk of volatile labour relations, rising costs, regulatory disruptions and dizzying shaft depths.
“AngloGold Ashanti’s South Africa region is contemplating the dismissal of certain employees on the basis of its operational requirements,” said a letter dated January 17 signed by AngloGold’ Chief Operating Officer Chris Sheppard.
The letter, addressed to union leaders and regulators, pegged the number of workers to be laid off at 849.
AngloGold, which vies with Gold Fields, Harmony and Sibanye Gold in South Africa, declined to comment on the number of jobs at stake but said it had started talks with unions and regulators that could lead to job cuts.
“Part of this process of engagement entails the necessary creation of a more sustainable and cost effective South African business that better reflects the realities of the operating environment,” spokesman Chris Nthite said.
The talks come about two years after AngloGold, which operates in eight other countries that include Brazil and Ghana, shelved plans to separate its local mines by spinning off its international assets into a new London-listed entity that it had hoped would have attracted a higher investor rating.
Output from AngloGold’s South African mines, which contribute roughly a quarter of the company’s nearly 4 million ounces in annual output, has been declining in recent years due to regulatory disruptions related to safety.
The spokesman for the National Union of Mineworkers, which represents the majority of workers in the sector, said his union looked at the matter with “serious concern.”
Solidarity trade union’s general secretary Gideon du Plessis said the lay offs did not come as a surprise because the company had been in consultation with union leaders for a few months.
“We are hoping that this process will be an isolated event and not trigger downsizing elsewhere in the company or from other mining houses,” du Plessis said.
Article courtesy REUTERS ~ Editing by Jason Neely and Alexandra Hudson