Restructuring at the troublesome South Deep gold mine will mean the loss of about 1,500 jobs. (Image: Gold Fields)
SOUTH AFRICA – Johannesburg-based Gold Fields has announced a restructuring at its South Deep gold mine. The mine, located 45 km southwest of Johannesburg in the Witwatersrand Basin, has been a challenging operation since Gold Fields purchased it from Barrick Gold in 2006.
The key challenge, according to Gold Fields, is the difficulty in replacing a conventional mining mindset and practice with a modern bulk, mechanized approach. Operating and overhead costs have been rising. The mine has consistently failed to meet production goals. Ground conditions need an exceptional amount of support. Poor maintenance has led to a drop off in equipment reliability. Labour productivity is significantly below the industry average. And to top it all off, the operation is overstaffed for the production rate the mine is able to reach.
This week Gold Fields announced that it will cut 1,100 employees and 460 contractors at South Deep. That is a 30% decrease in employees and a 24% reduction in contractors.
Likewise the scope of underground activities are being scaled back. Mining will be temporarily suspended on 87 level and workers will be redeployed to the 4W corridor. The eastern part of the mine will be serviced from the Twin shafts. Mining in the South shaft area will be reduced to a single shift per day. Growth capital expenditures for the next 18 months will be reduced to conserve cash. Detailed mine planning will be undertaken over the next few months.
The South Deep mine should be able to produce 281,000 oz. of gold annually. Additional information is available at www.GoldFields.com.