Trade union UASA has expressed concern that as many as 120 jobs may be lost during reorganization at Harmony Gold as the company focuses on mining more profitable areas. UASA head of mining Franz Stehring has pinpointed the single-shaft Doornkop operation, west of Johannesburg, as being the most likely to be affected by the “worst case scenario.”
Marian van der Walt, a Harmony spokeswoman, has advised staff to apply for voluntary retrenchment packages before 19 Januray 2014, while some may be moved to other operations before the number of forced job cuts is determined.
Despite being South Africa’s third-largest producer of the metal, Harmony Gold is wrestling a lower bullion price, higher costs and declining production volumes. The 28 percent dive that gold took in 2013 drove Harmony to suspend its dividend and write down its 50 percent stake in the Hidden Valley venture with Newcrest Mining in Papua New Guinea by $268 million.
At current prices, van der Walt says that mining Doornkop’s Kimberley reef isn’t viable and operations will instead focus on Doornkop’s more-profitable South reef. Harmony forecast production of 135,000 ounces to 145,000 ounces at Doornkop in fiscal 2014, according to the company’s annual report released in October. It expected capital and cash operating costs at the operation to average $980 an ounce to $1,080 an ounce.