Business News of 2014-02-04

Redundant mine workers hit windfall

Redundant mine workers are expected to receive what can be termed as a life-changing severance package averaging between US$75, 000 and US$120,000 in cedi equivalent.

This follows a negotiated settlement of their severance package with struggling mining firms who have begun downsizing their workforce with renewed pressure to cut cost as gold price falls.

Even though government has expressed worry at the austerity measures aimed at job cuts in the mining companies, redundant workers have begun counting their gains in what industry captains termed as ‘windfall gains’.

Chief Executive Officer of the Ghana Chamber of Mines (GCM), Dr Toni Aubynn, confirmed the “generous compensation” in an industry that is about to lose a quarter of its workforce.

The compensation package worked out for a redundant worker is three months times the number of years worked.

For instance, if one worked in a mining company for 10 years and depending on the monthly earnings, he or she could earn as much as US$120,000 or an average of US$75,000.

According to Dr Aubynn, the package on offer was the best in the West African sub-region and that was why there had not been any complaints since the lay-off exercise started last year.

“I think the compensation package is so generous that the affected workers can do a lot with it and leave an above average life if managed properly”, Dr Aubynn said.

The large-scale mining industry contributes about 27 per cent of all tax revenue to the state, but Dr Aubynn said the downfall of gold price would affect that critical contribution from the industry to the national economy.

“We don’t expect revenue to be as high as that of 2012 because of the falling gold price. But we think it’s a transitional period and we believe that 2015 will see some reasonable positive move in the industry,” he said.

“Although I’m a very optimistic person, I cannot be optimistic this time. I don’t see gold price increasing to a very significant level,” he said.

Mining giants like AngloGold Ashanti's Obuasi mine, which is a flagship for a country once called the Gold Coast is laying off 400 workers, whilst Newmont Ghana Gold is also brushing off 300 and Goldfields Ghana ,600 of its workforce.

Government worry

But the government is also concerned about austerity measures, which began last year and included job cuts, necessitated by a reduction in production following the falling price of gold on the world market.

Employment and Labour Relations Minister, Mr Nii Armah Ashietety, expressed the concern at a meeting with stakeholders in Accra on Monday.

A technical committee has consequently been set up by the government to look into how the effect of the redundancy could be mitigated.

According to Mr Ashietey, although the Ghana Chamber of Mines (GCM) had assured mine workers of “generous compensation” for those who would lose their jobs as a result of the austerity measures being adopted by mining companies, government was of the view that no matter how attractive such packages were, if the beneficiaries were unprepared for it and did not plan properly for them, such packages did not benefit them in the long run.

Present at the meeting were Dr Tony Aubynn, Chief Executive Officer (CEO)of the Ghana Chamber of Mines, Mr Prince William Ankrah of the Ghana Mine Workers Union (GMWU), Mr Alex Frimpong of the Ghana Employers Association (GEA), Mr Eugene Korletey, Acting Chief Labour Officer and Mr Kofi Asamoah, Secretary-General of the Trades Union Congress (TUC).

The large-scale mining industry in Ghana employs about 16,000 people, but about a quarter of that workforce is likely to be laid off by the end of this year, as mining companies take critical measures to deal with the falling price of gold.

The GCM envisages that mining companies will lay off between 2,000 and 4,000 workers by the end of this year, but in a worst-case scenario, the job cuts will be more than anticipated.

Source: graphic.com
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