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Gold Fields Ltd. said it may cut more than 1,100 workers at its huge, loss-making South Deep operation in South Africa.
The move according to the company will refocus the mine plan after repeated turnaround efforts failed.
South Deep, Gold Fields’s sole remaining mine in its home country and the world’s second-biggest known body of gold-bearing ore, has lost 4 billion rand ($283 million) over five years, the company said in a statement Tuesday. It’s also spent about 32 billion rand on the asset since 2006.
“Management believes that the mine can no longer sustain these cash losses,” Gold Fields said.
“The proposed restructuring at South Deep aims to consolidate mining activity to increase focus and to match the cost structure to the current level of performance.”
Gold Fields will reduce labor at South Deep, including potential cuts of about 460 contractors, and cut its equipment fleet, it said. Previous forecasts for production can no longer be relied on and the company isn’t yet able to predict how much gold it will produce at South Deep going forward.
It took a further writedown on the mine of 4.8 billion rand.
“Once the full impact of the mine planning exercise and proposed restructuring is completed, we will provide guidance for 2019 and beyond,” it said.
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