Shop stewards of the National Union of Mineworkers -- the biggest mining union in South Africa -- will meet next week to decide how to fight 8,500 proposed job cuts at AngloGold Ashanti, which could lead to a strike.
The gold producer said Wednesday it had to cut the jobs, out of a combined 28,000 workforce, at two of its aging mines because costs were skyrocketing, causing heavy losses in 2016.
"I foresee a strike over this. For us, this is a big deal. You have to remember that for every mining job, 10 people depend on the money it brings in. We are prepared to fight and that is what our shop stewards will be discussing next week," Livhuwani Mammburu, the national spokesman for the NUM said Thursday.
AngloGold Ashanti said in a statement on Wednesday that it lost money in the first quarter of 2017 at the TauTona and Kopaneng mines.
The company said its cost of production was $1,737/oz in Q1 at TauTona mine, and $2,399/oz at Kopaneng, at a time when the average gold price was $1,216/oz.
It plans to put the 36-year-old Kopaneng mine, in the Vaal region just outside Johannesburg, on care and maintenance along with the Savuka section of the TauTona site.
The latter section has been operating for 59 years and AngloGold Ashanti engineers reckon it has already worked 10 years past its planned life.
"This is a difficult decision, which follows a period of significant and -- ultimately -- unsustainable losses, and also the evaluation of the options available to return our South African business to profitability," AngloGold Ashanti CEO Srinivasan Venkatakrishnan said Wednesday.
Analysts in Johannesburg feel the AngloGold Ashanti retrenchments could be the first of many in the South African mining sector, given the added uncertainty created by new mining codes -- Mining Charter III -- that increase the cost burden on the industry.
"I think the mines are being squeezed from all sides and a lot of them will be closing down in the near future," Peter Major, a mining analyst with Cadiz Corporate Solutions in Cape Town, said Thursday.
