JOHANNESBURG (Reuters) – South Africa’s Gold Fields said on Tuesday it plans to slash costs at its struggling South Deep mine, including cutting 1,100 jobs, or around 30 percent of its workforce.
South Deep, the company’s last South African asset, has faced operational obstacles in a tough geological setting 3 km (2 miles) below the surface. The mine made a loss of 337.6 million rand ($27 million) in 2017.
Gold Fields shares opened 3 percent lower at 47 rand per share.
The bullion producer, which has invested 32 billion rand in the operation since acquiring it in 2006, said it could no longer sustain losses at the mine, which has missed several production targets despite significant modernisation.
“The key challenge has been the difficulty in transitioning the mine from one run with a conventional mining mindset and practices to mining with a modern, bulk, mechanised mining approach,” Gold Fields said in a trading update.
The firm also said it expects headline earnings per share for the six months ended 30 June 2018 to be unchanged at $0.08 per share compared with the previous reporting period.
Reporting by Tanisha Heiberg; Editing by Joe Brock