Date: 21 Jan 96 15:59:25 PST
From: Chris.Lowe@directory.Reed.EDU (Chris Lowe)
Subject: SA mine layoffs
S. African minister calls jobs threat "tragedy"
(Adds reaction from labour minister)
By Melanie Cheary, Reuter
18 January 1996
JOHANNESBURG, Jan 18 (Reuter) - Mining giant Anglo American
Corp of South Africa Ltd said on Thursday it might axe 10,000
jobs at the world's biggest gold mine in what Labour Minister
Tito Mboweni called a tragedy "too much to bear."
"The company cannot sustain these losses any longer and the
board has therefore identified five shafts, which under current
price, costs and productivity trends, will have to close during
the March quarter," said Bobby Godsell, chief executive officer
of the gold and uranium division.
The shafts are at Freegold mine in Free State province. A
sixth shaft could close in August, with another six shafts at
risk, Godsell said.
Mboweni issued a statement saying he would have a meeting
with Godsell soon "so that he can provide me with an extensive
"I am extremely concerned... The thought of approximately
10,000 workers being retrenched into an already high level of
unemployment society is indeed too much to bear.
"The negative impact on our society and others in southern
Africa will be too grave. This will be a tragedy of enormous
political, economic and social proportions," Mboweni said.
Mine management and union representatives will meet on
January 25 to consider the future of the shafts.
Of the five shafts identified for closure, three had limited
ore reserves while two still had considerable resources but were
currently uneconomic, Anglo said.
The group said it was expecting a 16 percent fall in gold
output at Freegold (Free State Consolidated Gold Mines) in 1996
to around 78 tonnes.
Elsewhere in its gold empire, however, Anglo is investing to
It plans to spend one billion rand ($275 million) on shaft
deepening at Western Deep Levels in a move will will extend the
life of the mine by 14 years to 2026, resulting in the
production of an additional 475 tonnes of gold.
And the company gave a bullish view of gold prices in the
year ahead which gold division chairman Clem Sunter said could
average $400 an ounce. Gold was trading at just under $398 an
ounce on Thursday afternoon.
"I believe that we have every reason to feel particularly
positive about the gold market and the gold price in the year
ahead," Sunter said.
All South African gold mines are struggling against the
backdrop of labour unrest, rising costs, declining ore grades
and stagnant prices in recent years.
The Witwatersrand basin around Johannesburg still contains
40 percent of the world's known reserves of gold. But South
African mines are having to go ever deeper to tap that wealth,
putting them at a competitive disadvantage against shallower