The Ghana Mineworkers’ Union (GMWU) has vowed to resist Newmont Ghana’s planned retrenchment of up to 600 workers by end of this month.
Newmont Ghana, which is part of US-based Newmont Mining Corporation, announced the job-cuts in February and said it aims to readjust expenditure to match a reduced mining rate. An earlier retrenchment in 2013 saw around 240 workers of the company’s Ahafo mine sent home.
But according to the union, Newmont has not built a convincing business case to further cut down its local workforce of more than 2,000. Instead, the company’s business outlook is vibrant, said Eric Kwabena Gyima, the union’s deputy general secretary.
The National Labour Commission has directed the union and Newmont to seek arbitration over the disagreement following the filing of a petition by the union, he said, and warned that the workers “will strike” if Newmont goes ahead with the lay-offs.
“We will go the long haul with Newmont if they go ahead and issue out redundancy letters to employees. We will strike for them to see,” he told the B&FT.
“Tomorrow, both parties are to choose the type of mediation they want. The commission has also ruled that if mediation fails we should return to them.”
Since January 2013, 3,080 members of the mineworkers’ union have exited the industry as companies downsize their workforce to manage a record slump in the gold price and spiraling costs.
The union says the workers affected account for 16 percent of its membership, and a few months ago it issued a statement saying: “It has almost become a ritual that the primary cost driver that companies manipulate in critical financial times is labour cost, particularly lower-level jobs. This is indeed worrying for us: that the falling price of gold has become a major source of job-insecurity for our members.”
Last month, AngloGold Ashanti, after sending home 430 workers last year amid a 28 percent fall in the gold price, said it will trim a significant part of its 6,500 workforce at its distressed Obuasi mine in a bid to restructure the business.
Mr. Gyima said the union has fully co-operated with companies that have shown justifiable reasons to retrench workers, but that in the case of Newmont, its budget and cost structure do not justify its plans to cut jobs.
The cost of equipment and supply contracts is 73 percent of Newmont’s budget, he said, whereas labour accounts for 21 percent. Deeper mining at Ahafo due to a declining ore grade has also raised the company’s expenses, he added.
Despite Newmont’s investment agreement with the government, which fixes its tax and royalty rates for the life of its projects, its head of Africa operations Johan Ferreira has said the country’s mineral tax regime has become unfavourable to investment, and that mining is not as rewarding as other industries.
“As an industry we do have a view that we need to have an environment where we can invest and attract investment; but with the current tax regime it does not play well for the mining industry in Ghana compared to other types of industry,” said Mr. Ferreira last week in an interview following his elevation to president of the Ghana Chamber of Mines.
Mohammed Amin Adam, who runs the Africa Centre for Energy Policy, a civil society think-tank, said in an interview that the challenges of the mining industry do not warrant reduced taxes by government but rather a stable fiscal regime that facilitates planning and investment prediction.
According to President Mahama, mining firms’ threats of job-cuts have caused the government to hold back plans to introduce a 10 percent windfall profit tax on the industry.
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