Business News of 2014-06-19

Sensitisation programme for retrenched Anglogold workers

The Ghana Mine Workers Union (GMWU) has started a programme to sensitise workers of AngloGold Ashanti Ghana to how to prudently manage their severance packages after their sudden retrenchment barely two weeks ago.

Negotiations have been concluded and unionised employees are to be paid 25 per cent of their annual salary multiplied by the number of years they have worked as their parting package as stipulated in their collective bargaining agreement with the company. By that calculation, a worker will get a minimum of US$90,000.

In an interview with the GRAPHIC BUSINESS in Accra on June 4, the General Secretary of the GMWU, Mr Prince William Ankrah, said besides the education, there was also an investment fair aimed at ensuring that the workers made the right savings and not engage in profligate spending to squander their financial lifelines.

He said the union already had a savings and loans company in Obuasi, Tarkwa and Accra and had intensified the sensitisation programme it began long before the retrenchment with the hope that by September, when the exercise was expected to end, most of the affected workers would be convinced to put their monies in the right investments.

“The campaign is working well and management is supportive. We have other investment teams drumming up the idea that it is really a tricky issue because their base pay, which by the Ghanaian standard is very competitive, a comprehensive medical facility and education sponsorship up to tertiary level being paid by the company are suddenly being withdrawn,” he said.

“Therefore, if they fail to invest this money well it will create an uncertainty for their families,” Mr Ankrah observed. The final phase of the retrenchment would see about 6,500 workers, including contractors, going home. Obuasi alone has about 3,000 workers.

Last year, about 430 workers were sent home in an exercise aimed at downsizing the workforce. Factors cited for the lay-offs include the rising cost of production, high underperformance of workers and unstable market prices.

But the workers have been assured that no one will be ejected forcibly from the company’s flats, as plans are afoot to help them relocate at a convenient time. It is estimated that Ghana produced over 14.4 million ounces of gold between 1471 and 1880, according to the 25th anniversary brochure of the Minerals Commission.

Production increased steadily as more mines went on-stream and reached a record peak of over 960,000 ounces in 1960, representing 2.5 per cent of the free world’s annual production. Production, however, started to decline in the late 1960s, and by 1983, Ghana produced only 280,000 ounces. This is where the liberation started and revived mining activities in the country. In 2012, Ghana produced 3.16 million ounces and last year, it saw 3.19 million ounces.

According to Mr Ankrah, the AngloGold situation is quite unique, and although the GMWU will be the hardest hit financially, with 40 per cent of its members losing their jobs, they cannot say no to the retrenchment because it is a necessary evil.

“The idea was that let’s listen to business case and if it makes sense then they will scale down to make sure that the mine bounces back efficiently, doing well for our nation, for the community and employees to also get their share,” he said.

He said Obuasi was an aged mine of about 117 years, while AngloGold had for the past 10 years done its bit to turn the business around. Media reports have been circulating that workers of AngloGold are happy about their retrenchment packages. However, Mr Ankrah said it was not only a question of going home with some money.

“They are not happy per se because the job is going that route, but obviously, if you are going home to be paid money that will help you live your life, then you will be happy,” he explained. The GMWU general secretary said the inability to use mining to catalyse development and local economies was also part of the lack of foresight as a nation.

Citing California in the United States of America, he said when gold was discovered in the area, primarily known for cattle ranching, the authorities planned to leverage the depletable resource.

“Now, the area has all the good banks, universities, among others and also feeds a quarter of Americans today. From a sparsely populated area in 1700, about 38 million people now reside in California,” Mr Ankrah said.

“We have just been inward looking and today we are crying because the mine will one day not be there. So we have to plan ahead in such a way that these mining townships do not become ghost towns,” he said. To GMWU, it is a question of how much lessons the country has picked, and assuming Obuasi Mine is not going to bounce back, how prepared are we to implement what others did elsewhere, he quizzed.

“One of the lessons to learn is that we cannot only take resources or receipts from mining companies and only put them down in state coffers without really planning about how we can ensure that these townships have vibrant and buffer industries that will keep them alive even when the mines are no more there,” he said.

The GMWU general secretary urged that Ghana needed to plan ahead with a clearly outlined road map for the developmental agenda for all mining communities, so that these townships do not become ghost towns, after having put a lot into the state coffers.

He also urged civil society groups to be focused, with mining communities and their leaders playing active roles.

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