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Gold Fields could lay off 6,900 workers because of power cuts

Gold Fields could lay off 6,900 workers because of power cuts

Africa's second largest gold producer may lay off 6,900 workers because of electricity shortages in South Africa, according to a company statement Monday.
The Gold Fields Ltd. statement forecast a decline in production of up to 25 percent in the first quarter of the year _ production was suspended for a week in January because of power cuts. Gold Fields also predicted a decline of up to 20 percent in the next quarter because of a 10 percent power reduction imposed by the state utility.
Mining companies across the country were forced to shut down for five days last month after the state electricity supplier, Eskom, could not provide steady power, and the drop in production helped send mineral prices higher on world markets. Mines are now receiving 90 percent of their normal power supply, a situation that is expected to last the next four years.
The government has blamed rising demand and cheap prices for its power problems, though conceded it ignored warnings 10 years ago that more investment in power generating facilities was needed.
Last week, Finance Minister Trevor Manuel announced what he described as a "loan" of 60 billion rands (US$8 billion) over the next five years to help Eskom overcome the supply crisis _ one that also has hit neighboring countries to whom South Africa exports power. Botswana and Namibia, both big mining countries, import South African power.
Gold Fields said it would have to suspend, scale back or close some of its South African operations, and may have to eliminate the jobs of 6,900 of its 53,000 workers.
The company said it was meeting with unions and other employer associations to discuss alternatives to save jobs, including early retirement, voluntary retrenchments, contractor replacement and redeployment elsewhere in the group.
South Africa's mining industry says it contributes 18 percent of the country's gross domestic product and employs more than 400,000 people.


Updated : 2021-05-06 15:30 GMT+08:00