Business News of 2014-02-25

Massive redundancy to hit Newmont Ghana

Mining giant, Newmont Ghana is planning to lay off about 600 of its workers by the end of the second quarter.

The move is part of the firm’s retrenchment plan to ensure the continuous operation of its concessions in Ghana.

In the wake of the falling prices of gold and economic hardship, players in the Gold mining Industry continue to struggle to keep up with their operations.

Newmont’s retrenchment plan last year saw about 250 of its staff sent home.

Citi Business News gathers the staff has been alerted of another phase where about five hundred to six hundred people will lose their jobs by the end of June this year.

A memo from the Regional Senior Vice President of Africa Region, Dave Schummer to all of its Ghana employees cited by Citi business News indicated that there were more issues than the generic fallen prices of the precious metal.

The memo points to the fact that the Ahafo concession was beginning to experience the challenges that typically face an aging mine. “Ore is deeper and of a lower grade.

Hauling distances have increased, taxing equipment and fuel needs. Equipment in general has aged and requires larger sums of sustaining capital replacement. All these changes burden our cost position at Ahafo” Schummer said.

He indicated in the memo that Newmont had elected to realign Ahafo’s mining plan with its current milling rate. The measures available are to

· Reduce the mining rate by removing equipment and reducing waste stripping

· Limiting sustainable capital expenditures associated with a reduced mining rate.

· Reducing labour force to align with the reducing mining rate. This will include less site and regional administrative support.

The changes are expected to begin in this first quarter and will be fully completed by the end of the second.

“At present, we anticipate that approximately 500-600 employees will be impacted by the changes underway, including national management employees, senior and junior staff as well as expatriates”

“We are currently working to complete a memorandum of understanding with the Ghana Mine Workers Union to define the contractual elements to pay to our impacted employees as is covered under our Collective Bargaining Agreement.”

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