PAN African Mining has terminated contracts for 150 employees as it scales down operations due to low production attributed to the absence of additional exploration and development.
BY VICTORIA MTOMBA
In a response to inquiries by NewsDay, Pan Africa Mining head for human resources Cyndrella Musimbe said the termination of fixed term contracts was an exercise at all levels adding that not employees made redundant by the scaling down of operations would be laid off.
Some employees would be absorbed at Aryshire Mine within commuting distance from Muriel Mine, she said.
Pan African Mining runs Aryshire Mine in Banket and Muriel Mine in Mutorashanga.
“It’s not entirely true to say it’s a retrenchment exercise of the 150 employees, 139 were from terminations of fixed term contracts while 11 were retrenchments,” she said.
She said Muriel Mine has 368 employees and after the termination of fixed term contracts and retrenchments would operate at most with 200 employees. Ayrshire Mine has 474 employees.
After the retrenchment exercise, the group will remain with 720 employees from 870.
Musimbe, however, could not disclose how much the company has spent on the exercise.
She said the company breaks even when it produces 20kg per month, but has been producing around 14kg per month, resulting in accumulated losses.
“We have carried out surface exploration which will allow the mine to continue processing ore mined from open pits. As such the underground employees will be without jobs which has resulted in the labour rationalisation,” Musimbe said.
“Being a relatively deep mine, the mine needs ore grades of around 4 to 5 grammes per tonne but currently, we have been mining around 2,5 grammes per tonne. The underground has proved unviable in the absence of additional exploration and development.”
In the outlook, Musimbe said the group planned to invest additional capital over the next five months to install a plant which would allow the company to process gold production of 20kg.
“We are currently undertaking a feasibility study for processing the dumps at Muriel. If this project proves viable, it will require capital of around $17 million and will result in Muriel producing a total of around 50kg per month,” she said.
Musimbe said that the project was running behind schedule as the company has been facing delays in getting export permits for the samples to be sent to South Africa for metallurgical test work.
“It is anticipated that after this exercise the company may achieve break-even position though for the 2016 full year, it will be negative position. The mine has failed to meet its production and cost targets in the last years,” she said.
The company is facing electricity tariffs which run around US cents 13 kwh, whereas other industries are paying US cents 9kwh. The royalties have also been a challenge to them.
Muriel Mine’s gold mining activities have been affected by a difficult operating environment in the country and the industry.