Thousands of workers of Anglo Gold Ashanti are set to lose their jobs as the company scales down its operation.

The retrenchment of almost all its staff at its Obuasi concession of the mining company is triggering fears of a devastating impact on the Ashanti Region town.

The Mine Workers Union is warning this might just be the tip of the iceberg as more mining firms also prepare to lay off workers.

Executives of Anglo Gold Ashanti today addressed the affected workers at a durbar.

They were told the company is not breaking even and therefore has to do care and maintenance of existing ore for the next two years, Luv FM’s Erastus Asare Donkor reports.

For a start, they were told over 400 workers would be laid off this year at the Obuasi Mine and more will follow in the subsequent years.

The Obuasi mine has been in operation for a little over 100 years but the redevelopment is expected to extend the life span of the mine to about 17 years.

The Chief Executive of Ghana Chamber of Mines Sulemanu Koney told Joy News the redundancy is coming on the heels of some “operation challenges” facing AngloGold Ashanti.

Cost of input has been generally very high, he said.  Diesel price, labour cost and imported chemicals have extremely shot up, he explained.

Mr Koney noted that the situation has been compounded by dwindling price of gold.

He said the government and other stakeholders must now understand and appreciate the challenges the industry is going through.

He is however optimistic the difficulty he described as a medium term problem would be over in the near future.

“We should be able to come out of the woods in the shortest possible time,” he hoped.

Municipal Chief Executive for Obuasi, Richard Ofori Agyeman Boadi explained the exercise is “not a total closure of the mine”.

He explained that the ore deposit in the underground mine has depleted hence the need for redevelopment for the company to get value for money. Surface mining will however go on, he said.

He also placed on record that the number of workers to be retrenched is far lower than being speculated.

But admitted the initial retrenchment of the workers will affect the local economy as all activities there evolve around mining.

He said he is worried the development would worsen the unemployment situation the Assemble is battling to deal with.

Mr. Boadi however assured residents that the Assembly is on top of the game to manage any security concerns that may arise.

The Assemble is also working on an artisanal site, the semblance of Suame Magazine in Kumasi, for interested persons and workers to be retrenched.

General Secretary of the Mine Workers Union, Prince William Ankrah told Joy News the scaling down of the company’s operation will automatically affect many contracting firms.

He described the Obuasi mine as the “cash cow” of the town and surrounding communities.

Most of the workers there have welcomed the exercise and described the decision reached with the company as mutually beneficial.

Mr. Ankrah said after checking the redundancy package, the workers are satisfied with what they will take home. He said per national bench mark, “it is the best or among the best”.

Meanwhile, the Member of Parliament for Obuasi, Kwaku Kwarteng has called all to support the company to bounce mark. He also called for mitigation measures from all stakeholders to deal with the consequences of the exercise.