Harmony to close three shafts

Johannesburg, South Africa — MININGREVIEW.COM — 19 April 2010 – Harmony Gold Mining Limited “’ Africa’s third-largest miner of the precious metal “’ will close three shafts at its Virginia operations because they have no remaining payable  reserves, and almost a tenth of the company’s workers  will either lose their jobs or be transferred.

A company statement issued here said that about 3 700 employees would be affected, with some moved to other operations, and others offered early retirement and skills training. Harmony employs a total of about 41 000 people.

The statement explained that employee representatives, through their trade unions, had been informed of the closures, and management would embark on a formal consultation process with them, facilitated by a senior commissioner from the Commission for Conciliation, Mediation and Arbitration (CCMA), in terms of Section 189A of the Labour Relations Act, to consider alternatives to retrenchments. This action was in line with Harmony’s stated strategy to restructure for quality ounces, thereby improving its asset mix.

Bloomberg News reports that African gold miners including Harmony and AngloGold Ashanti Limited are trimming expenses as they pay more to extract the metal because they must dig deeper to mine shrinking reserves. Harmony mined 1 000 to 1 300 kilograms less gold last quarter than in the previous three months, the company said.

“While the Harmony 2, Merriespruit 1 and Merriespruit 3 shafts have been in existence for almost 60 years and are very much a part of Harmony’s history, we have taken a thorough, informed decision that they have reached the end of their lives. We have indicated for some time that marginal, loss-making operations would have to close for the company’s greater good,” said Harmony CEO Graham Briggs.