About 1,700 workers of the mining giant, Goldfields (Tarkwa Mine), may have a bleak Christmas, as the company is considering downsizing its workforce.
Goldfields is currently embarking on an aggressive business option dubbed, ‘Contract Mining,’ hence its decision to lay off hundreds of workers.
It has actually planned to issue dismissal letters to workers from Wednesday, December 13, 2017.
The workers say Goldfields is embarking on this exercise with the explanation that its current Life of Mine (LoM) stands between 5 and 6 years and therefore, cannot purchase new mining fleet, considering the short payback period.
However, relevant documents sighted by this paper have cast doubts over Goldfields’ claim that its LoM stands between 5-6 years.
Indeed, a statement sighted on Goldfields website, https://www.goldfields.co.za/west-africa-region.php, raises more questions than answers.
“World-class, low-cost surface mine with a 6.1Moz Mineral Reserve and 15-year life (nine years mining, followed by processing of the surface stockpile and South Heap Leach material) that remains strongly geared to the gold price – strong potential for leveraging resource ounce conversion and driving larger pits with high gold price,” the website states.
Additional documents obtained by this paper further expose Goldfields.
According to its 2016 audited Mineral Resources/Reserve report, Goldfields currently has 6.1 million ounces in mineral reserve and 3 million ounces in mineral resource with the potential to convert most part of this resource into reserve and increase the LoM based on an aggressive exploration plan supported by a more favourable economic environment.
“With a projected average gold production for 2017 of 545,000 ounces, if you deplete that from the reserve of 6.1 million ounces as at December 2016, the mineral reserve at the close of 2017 will stand at 5.55 million ounces. This converts approximately to a 14-year life (eight years mining, followed by processing of the surface stockpile and South Heap Leach material). This however, means that with an aggressive exploration plan, supported by a more favourable economic environment, the LoM of GFG could go beyond its current 14-year life.”
The workers therefore believe that the decision by Goldfields to adopt contract mining strictly on the basis of a limited LoM of 5-6 years is totally “unfortunate and disingenuous.”
“On aging fleet, GFG has unsuccessfully tried to create the impression that for the business to remain viable, it needs to replace all its current fleet en bloc – a situation we find extremely unrealistic both in theory and practice. It is important to state that like every business, particularly mining, a bit of capital injection from time to time remains critical to sustaining the business and expanding it. It is of this background that a fleet replacement plan remains inextricably linked to mine planning and therefore often incorporated into every mine plan,” Prince William Ankrah, General Secretary, Ghana Mineworkers’ Union, explained in a statement.
This will be the second time Goldfields is laying off staff in three years.
In 2014, its Damang operations sacked over 400 workers with a similar excuse.
However, workers at the Tarkwa Mine are bent on resisting any attempt to sack workers in the coming days when proper negotiations and engagements have not fully been completed.
Goldfields Reacts
In a statement issued last night in response to the threats by the workers, Goldfields insists that the aging mining fleet and a limited mine life, had made it imperative to change its operating model from owner mining to contract mining, saying that only 1,500 employees would be affected.
“The mine, since it started production in 1996, operated the contract mining model until 2004 when it switched to owner mining. Under the owner mining model, the Tarkwa Mine acquired, operated and maintained its own mining fleet. Over time, however, most of the mining fleet have aged and need to be replaced,” it stated.
It said it would require an estimated $519 million of sustaining and operating capital to maintain operations over the next 5 to 6 years.
“The contract mining option will provide healthy fleet for higher productivity (through increased equipment availability) and allow the mine to focus on aggressive exploration to potentially extend the mine life,” it explained.