The consultation about workforce reductions follows a decision to restructure Sishen Mine to a lower cost pit configuration. This was necessitated by sharply lower iron ore prices and both increased capital costs and increased operating expenses due to the current high waste stripping requirements. The new mine plan will exclude areas with high strip ratios, resulting in less waste needing to be mined as well as a decreased level of iron ore production. The new Sishen mine plan significantly reduces mining and production activities and necessitates a re-evaluation of the equipment and workforce needed to support a smaller, more focused operation.

The restructuring of the mine will impact approximately 2,633 Kumba employees. Contractors at the mine have commenced with their restructuring process and approximately 1,300 contractors will be affected. SIOC is conducting extensive consultations with all stakeholders.

Norman Mbazima, CEO, stated: ‘This has been an extremely difficult decision but, after exhausting all other avenues and doing all we could have done to reduce costs, we have no choice but to take more significant steps to preserve the viability of the mine. We are mindful of the sensitivity that this situation demands, and are committed to supporting all our employees at Sishen, as we have done throughout the other restructuring processes at Kumba. We aim to ensure that our people are treated with the same care and respect throughout this difficult process.’

Kumba will engage and update all stakeholders as necessary.

Centurion
XXX January 2016