South Africa’s Gold Fields to cut jobs as mine loses $284m in 5years

South African miner Gold Fields has revealed plans to cut about 30 percent of its workforce in a cost reduction effort at its struggling South Deep mine. The mine, which has lost 4 billion rand ($284 million) over the past five years, amid failed turnarounds, has the world’s second-biggest known gold deposit but its has struggled for more than a decade, despite Gold Fields’ investment of 32 billion rand since acquiring it in 2006.

“The mine is losing around 100 million rand a month in cash. We need to take steps to stop the cash negative impact,” Chief Executive Nick Holland said during a conference call.

Gold Fields disclosed that the major challenge its South Deep mine has faced is transitioning the mine from one run with a conventional mining mindset and practices to mining with a modern, bulk, mechanised mining approach.

Apart from cutting more than 1,000 jobs, the restructuring which Holland said will be announced in February, will involve reducing mining activity in some sections, reducing the equipment fleet and lowering capital expenditure.

“This has not been an easy decision and comes after many other initiatives have been attempted where we haven’t seen results,” Holland said. “We believe this is the best short-term initiative to resize the operation and look at what a more realistic operation would be.”

Shares in Gold Fields fell 13.49 percent to 42 rand by 1:43 SAST.