[miningmx.com] – SOUTH African gold mining companies have retrenched hundreds of head office jobs as the slide in the price of gold makes most of the sector loss-making after paying for development and exploration costs.
Gold Fields said it had reduced about 40% of its head-office staff reducing the headcount from just over 100 to under 60. Many of those affected had been redeployed “to the regions” while other retrenchments were voluntary, said Sven Lunsche, spokesperson for Gold Fields.
“It’s part of our strategy of divesting greater responsibility to the regions in terms of improving production and productivity,” he said.
AngloGold Ashanti had heavily reduced numbers at its office in downtown Johannesburg although the company stopped short of detailing numbers.
“As we mentioned earlier this year, we’re looking to realise significant savings in our corporate costs, and also in direct operating costs,” said Stewart Bailey, AngloGold Ashanti’s senior vice-president of investor relations.
“Given the recent weakness in the gold price, it’s more important than ever that we continue to look for all available opportunities to realise these savings and increase efficiency across the business,” he said in an e-mailed note.
Harmony Gold said an estimated 500 employees across the company, including its service and corporate departments, have been involved in the firm’s voluntary termination process.
“We are still in the process of ensuring the R400m are saved and we will provide an update on 14 August 2013 at our results,” said Henrika Basterfield, investor relations spokesperson for the company.
The terminations come as analysts take a dimmer view of the prospects for the gold companies listed on the JSE, a situation compounded by lower-than-guided full-year production at Harmony Gold and AngloGold Ashanti.
Break-even on a free cash flow basis, including all-in sustaining costs, for the JSE’s main gold companies has been estimated at between $1,500 for Harmony Gold and AngloGold Ashanti, and $1,390/oz for Gold Fields.
David Davis, an analyst for Standard Bank Group Securities, said Harmony Gold would miss its production guideline by 3% coming in at 1.15 million ounces partly owing to slower than expected build-up at Kusasalethu.
AngloGold Ashanti’s production would be significantly lower than guided, down some 11% owing to lower production at Obuasi while mill maintenance at Geita would also see output disturbed, Davis said.
