As part of developing a new operating plan, the company says it may cut 1850 jobs from Ezulwini's 3745-strong workforce. The focus of the new plan - First Uranium says - will be on safety, improving mining efficiency and reducing fixed costs.
Following an alarming surge in mine deaths in 2007 (according to the company, there have been four fatalities at the Ezulwini mine), the government instructed South African miners to halt operations when fatal accidents happen, until an inspection team had investigated. According to Business Day, First Uranium said in a statement that fatal accidents in the latter half of the calendar year "have had a significant impact on employee morale and productivity, and as such the expected improvement in production has not been forthcoming." More than 50000 miners have been killed in the past century in South Africa's gold mines, which are among the deepest and most dangerous in the world.
"Action must be taken now to mitigate the effects of the Christmas shutdown and provide employees with an opportunity to increase productivity levels while reaching a consensus around the nature and scope of changes necessary to implement the new operating plan," the company said. First Uranium's SA-listed shares have plunged 82% this year, while its Toronto-listed shares have dropped 86%. The forced closure of mines after fatal accidents compounds South African producers' inability to fully benefit from gold's 11-year rally as they have to dig further to reach dwindling ore and pay labour and energy costs that are rising faster than inflation.
Read the full article on www.businessday.co.za.
For more information, go to www.firsturanium.com.
