Mantashe: Going for job cuts in mine sector the easy way out

Gold Fields, which is due to report half-year results later, said this week it would cut 1,100 permanent jobs at its South Deep mine, sending its shares plummeting.

FILE: Mineral Resources Minister Gwede Mantashe. Picture: Thomas Holder/EWN.

JOHANNESBURG - Gold Fields’ plan to cut jobs at its struggling South African mine fails to address “poor management”, Mineral Resources Minister Gwede Mantashe said on Thursday, piling pressure on chief executive Nick Holland.

Gold Fields, which is due to report half-year results later, said this week it would cut 1,100 permanent jobs at its South Deep mine, sending its shares plummeting.

“Gold Fields is sitting on the second biggest gold deposits in a mine in the world,” Mantashe, told Reuters. “Going for job cuts is the easy way out. The real problem is poor management.”

South Deep, the company’s last South African asset, has faced operational obstacles in a tough geological setting 3km below the surface and has lost R4 billion over the past five years.

In response, Gold Fields said on Thursday it would make further comments on the restructuring plan during its interim results presentation.

Holland said on Wednesday the job cuts were a “last-gasp measure”.

Unemployment in Africa’s most industrialised economy stands at more than 27% and job cuts are a hot political issue ahead of national elections next year.

Gold Fields, which unveiled a plan in February 2017 to make its mechanised South Deep mine profitable, is the latest firm planning to cut jobs in the mining industry.

Earlier in August, Impala Platinum said it would slash its workforce by around a third over two years.

The 12,600 jobs are also on the line over a three-year period as miner Sibanye-Stillwater seeks to acquire target Lonmin.

Mantashe, a former trade unionist, told Reuters he was engaging both Impala and Gold Fields over the planned layoffs.

“We want to support them, but they come to us after making these announcements. It is deviant behaviour,” said Mantashe.