Sishen Iron ore Mine
Kumba Iron Ore, South Africa’s largest producer of the crucial steel
ingredient, is slashing the workforce at its flagship Sishen mine by nearly
half to cope with weak iron ore prices.
The Sishen mine, the largest source of iron ore in South Africa for
decades, has undergone a major change because of the enormous amount of waste
that had to be moved to expose ore.
The change has not been quick enough and majority
shareholder Anglo American told investors last month a decision had been taken
to shift focus away from volumes and instead focus on cutting costs, reducing
capital expenditure and boosting cash generation.
The production forecast was lowered to 26-million tonnes a
year at a unit cash cost delivered on board ships in Saldanha port of less than
$30 a tonne this year, giving a break-even price of landing ore in China at
below $40 a tonne.
As part of this new plan, the workforce would have to be
cut, Kumba said yesterday. Of the 5,840 employees at Sishen, Kumba aims to
reduce the number by cutting 2,633 direct employees and 1,300 contractor jobs.
Kumba issued the unions a section 189 notice on Thursday,
starting a 60-day process to reduce the workforce.
“This has been an extremely difficult decision but, after
exhausting all other avenues and doing all we could have done to reduce costs,
we have no choice but to take more significant steps to preserve the viability
of the mine,” CEO Norman Mbazima said.
Sishen is the largest single source of jobs in Kumba, which
employs 7,434 people after it stopped mining the Thabazimbi mine last year,
removing 1,160 jobs. In July last year, Kumba told the unions it wanted to cut
175 jobs at its Northern Cape mines — Sishen and Kolomela.
“It cannot be correct that as and when the mining industry
is under distress the first casualties are ordinary employees,” said Lucas
Phiri, National Union of Mineworkers chief negotiator at Kumba.
The dramatic fall in the iron-ore price, which Bloomberg pegged
at less than a quarter of its peak in 2011 — hovering at the $41 a tonne mark —
has put pressure on the iron ore producer’s balance sheet.
Kumba on Thursday reported a 12% drop in its fourth-quarter
output to 10.04-million tonnes, dragged down by poor performance at Sishen. For
the year, its output was down 7% at 44.88-million tonnes.
The Sishen mine was moving to a lower-cost pit layout and
there was not enough exposed ore as the transition was being made.
Sishen’s output in the fourth quarter fell 17% to
7.7-million tonnes.
Kumba’s exports sales fell 10% to 10.5-million tonnes in the
quarter and the company had a 4.7-million tonne stockpile, down from
6.5-million tonnes at the end of 2014.
Source: bdlive
0 comments:
Post a Comment