Village Main Reef to lay off 6,000 gold miners, says NUM

Village Main Reef (VMR) has issued a “Section 189” — the legal notice needed to start consultation towards a retrenchment process — and aims to lay off 6,309 workers, according to the National Union of Mineworkers (NUM).

Company CEO Jeff Dong confirmed to Business Maverick that the Section 189 had been issued but said the company had not made any firm decision to shed jobs, as alleged by NUM.

“To the extent that retrenchments are deemed necessary, the number of employees impacted will only be determined following the consultation process,” Dong said. He said the Section 189 notice “is obviously an unfortunate situation but we hope that, through constructive consultation with all stakeholders, the possibility of retrenchments will be avoided or minimised”.

Business Maverick reported in February that the company was on the verge of collapse and it subsequently admitted it had “financial challenges”. (URL:https://www.dailymaverick.co.za/article/2020-02-06-vmr-admits-to-financial-challenges-but-says-is-confident-about-future/)

Business Maverick understands a number of contractors, including small companies that have “tolling agreements” — whereby they deliver ore to a gold miner who pays them when the final product is delivered to the Rand Refinery — have not been paid for their services by VMR.

“This inhumane brutality happens at the time when the country is fighting the spread of Covid-19 and the government has issued numerous calls to companies to do all within its powers to save jobs,” NUM said in a statement.

NUM spokesman Livhuwani Mammburu said the union wanted VMR’s Chinese managers “... to hand over the licence to the Department of Mineral Resources and Energy and leave the country. They are not interested in mining in South Africa.”

Dong responded that VMR was not planning to issue a Section 189 notice.

“We were carrying out a turnaround strategy since February, with the new leadership appointed at VMR, to push through operational efficiency improvements. We were just starting to see positive signs of improvement in March when unfortunately the turnaround strategy was abruptly interrupted by the outbreak of Covid-19 in South Africa and the subsequent lockdown and its extension.

“Both of our mines — Tau Lekoa and Kopanang — were forced into care and maintenance. After serious discussion, the company has had to make the difficult decision to issue the S189 notice, while keeping the mines on care and maintenance due to genuine health and safety concerns.”

The move comes at a time when the gold price is at historic highs in rand terms, at over a million rand a kilogram. However, VMR’s operations have been challenged by poor grades and allegations of mismanagement.  BM