Kumba's Sishen iron-ore mine.
JOHANNESBURG (miningweekly.com) – The Sishen Iron Ore Company on Thursday started its retrenchment consultation process, which affects 3 933 employees and contractors.
The Labour Relations Act Section 189 and 189A consultation on workforce reductions – which has already begun for 1 300 contractors – will now be extended to 2 633 direct employees of the JSE-listed Kumba Iron Ore, an Anglo American group company.
This follows a decision to restructure to a lower cost configuration the pit of the Sishen mine.
Kumba said in a media release on Thursday that the reconfiguration significantly reduced mining and production activities and necessitated a re-evaluation of the equipment and workforce needed to support a smaller, more focused operation.
The reconfiguration of the pit had become necessary as a result of the sharply lower iron-ore prices as well as the increased capital costs and higher operating expenses resulting from waste stripping at the opencast operation.
The reconfiguration excluded areas with high strip ratios, in order to better position the company through reducing the waste needing to be mined, but also lowering the volume of iron-ore that can be produced.
“This has been an extremely difficult decision,” Kumba CEO Norman Mbazima commented, adding that after doing everything possible to cut costs, the company had arrived at a point where it had 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,” he said, adding that Kumba was committed to supporting all of its Sishen employees, as had been the case throughout the other restructuring processes at Kumba, which last year closed its Thabazimbi iron-ore mine in the Limpopo province.
“We aim to ensure that our people are treated with the same care and respect throughout this difficult process,” he added, in reference to Thabazimbi, where the workforce had praised the manner in which Kumba engaged with personnel during the Section 189 consultation process.
However, the National Union Mineworkers (NUM) said in a media release that it was “concerned and saddened” by Kumba’s intention to retrench Sishen workers.
"It cannot be correct that as and when the mining industry is under distress the first casualties are ordinary employees,” said NUM chief negotiator at Kumba Lucas Phiri, who urged the government to consider revoking the mining licences of mines which shirk their social responsibilities.
Phiri decried the environmental impact of opencast mining operations and condemned the potential dismissal of 2 633 employees and the impact of retrenchments on the surrounding areas of Kathu and Kuruman.
He calculated that as a single mineworker took responsibility for ten others, the real impact would be on 26 000 people.