South African precious metals producer Sibanye-Stillwater confirmed on Wednesday that it had laid off more than 2,000 gold miners as it shuts its loss-making Cooke shafts where illegal mining syndicates have plagued its operations.
Layoffs are a thorny political and social issue in South Africa, where the jobless rate is close to 28 percent and labour groups including the National Union of Mineworkers (NUM) are allies of the ruling African National Congress (ANC).
The NUM, which plans to hold a rally on Wednesday to protest the job cuts, announced the retrenchments on Tuesday.
“Unfortunately it was not possible to define realistic arrangements to operate Cooke 1,2 and 3 on a profitable basis,” Sibanye said in a statement.
Sibanye has said it aims to not produce unprofitable ounces and that it expects a loss this year of at least 4.6 billion rand ($325 million) compared with attributable earnings of 3.7 billion rand last year due to of impairments and restructuring.
The company initially said that 2,025 workers would be laid off at Cooke while 1,350 elected voluntary separation packages. A spokesman later said around 165 of the job cuts were at its Beatrix West mine. The company has almost 59,000 employees.
The miner said it would keep Beatrix West running and that it would “remain in operation for as long as it makes a profit, on average, over any continuous period of three months.”
It had previously shelved plans to cut jobs at some of its platinum mines and said on Wednesday that transfers and other measures enabled it to preserve 3,282 jobs.
Sibanye said three months ago that layoffs were in the pipeline as it embarked on restructuring talks, mandated by law, with unions and the government.
The Cooke operations 80 km (50 miles) west of Johannesburg have been the centre of illegal mining activities, hitting profit margins because of security costs and lost ore. The shafts also experienced a violent wildcat strike in June.
Illegal gold mining has plagued South Africa for decades, with bullion pilfered from disused and operating mines, and Sibanye has vowed to clear illegal miners from its shafts by January.
South Africa has produced over a third of the gold ever mined but the industry is in decline with shafts plunging to depths of up to 4 km and costs soaring.
According to Chamber of Mines data, the gold sector employed 116,500 miners in 2016, down 35 percent from 180,000 in 2004.
($1 = 14.1351 rand)
Editing by Kim Coghill and Jason Neely