Kumba Iron Ore announced on Thursday that it has commenced a workforce retrenchment consultation process at its Sishen iron ore mine, in the Northern Cape.

The consultation process, in terms of Section 189 and 189A of the Labour Relations Act, has already begun for 1 300 contractors employed at the mine and will also affect 2 633 direct employees of Kumba Iron Ore – a business unit of Anglo American.

The consultation about workforce reductions follows a decision to restructure Sishen mine to a lower cost pit configuration.

This was necessitated by sharply lower iron ore prices and both increased capital costs and increased operating expenses due to the current high waste stripping requirements.

The new mine plan will exclude areas with high strip ratios, resulting in less waste needing to be mined as well as a decreased level of iron ore production.

The new Sishen mine plan significantly reduces mining and production activities and necessitates a re-evaluation of the equipment and workforce needed to support a smaller, more focused operation.

“This has been an extremely difficult decision”, says Kumba CEO Norman Mbazima, adding that after exhausting all other avenues and doing all we could have done to reduce costs, we have no choice but to take more significant steps to preserve the viability of the mine.

“We are mindful of the sensitivity that this situation demands, and are committed to supporting all our employees at Sishen, as we have done throughout the other restructuring processes at Kumba. We aim to ensure that our people are treated with the same care and respect throughout this difficult process,” he noted.

Kumba said that it will engage and update all of its stakeholders as necessary.

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