29/06/2017 08:09 SAST | Updated 29/06/2017 08:09 SAST

Anglo To Cut A Third Of Its Workforce

The gold miner says closing two of its mines is unavoidable, and thousands of jobs will be lost.

Bloomberg via Getty Images
Srinivasan Venkatakrishnan, chief executive officer of Anglogold Ashanti Ltd., speaks during his presentation on the second day of the Investing in African Mining Indaba in Cape Town, South Africa, on Tuesday, Feb. 7, 2017. A mix of shrinking reserves, rising labor costs, frequent stoppages and regulatory uncertainty has prompted major miners to rethink their presence in the country, home to the worlds largest platinum, chrome, and manganese reserves and the source of one-third of all gold ever mined. Photographer: Halden Krog/Bloomberg via Getty Images

AngloGold Ashanti could cut jobs amounting to a third of its South African workforce, Business Day reported. This could amount to about 8500 jobs. The company announced plans to close two unprofitable mines on Wednesday.

"This is a difficult decision which follows a period of significant and, ultimately, unsustainable losses and also the evaluation of the options available to return our South African business to profitability," said CEO Srinivasan Venkatakrish.

According to Business Day, he said it was "critical that we act to project the long term sustainability of the business and the majority of our workforce."

AngloGold will now begin a 60-day process at the Commission for Conciliation, Mediation and Arbitration (CCMA) along with unions to mitigate job losses.

Business Day reported that the depletion of ore at its Kopanang and Savuka mines means their costs are too high.

The National Union of Mineworkers reportedly said it was "angry and shocked" at the news.

According to Bloomberg, AngloGold made its first loss in South Africa since 2012 in the first quarter of this year. In May, it said it was reviewing operations in South Africa, where it employs 28 000. South Africa has shed about 70 000 jobs over the past five years in the mining industry, the Chamber of Mines reportedly said.

NUM spokesman Livhuwani Mammburu told Eyewitness News (EWN):

"One mineworker supports close to 10 family members, imagine 8,500 and how many family members and relatives are going to be affected."

But Venkatakrishnan said: "Unfortunately the inevitable has happened and in gold mines, every day you are mining you bring it one day closer to eventual closure – that's the reality, it's not a renewable resource."