11th November 2008
JOHANNESBURG (miningweekly.com) – Uranium One has started retrenching about 1 013 of its 1 175 employees employed at the Dominion mine, in South Africa, trade union Solidarity said on Tuesday.
Solidarity received an Article 189 notice from the Toronto-based uranium producer Uranium One, in which the company gave notice that it had initiated the retrenchment process.
The Dominion operation was placed under care-and-maintenance at the end of October , after the company reported a significant deterioration in the project’s economics. This was associated with the continued decline of uranium prices over the last year and significant inflation, which affected project costs.
The world-wide economic problems have also placed further pressure on the company. Furthermore, the cost of explosives rose by 70% since March this year while the price of sulphuric acid increased by 290% since the mine opened two years ago.
The mine has also experienced problems with reaching its production targets.
“Management has now decided to place the mine under so called ‘care-and-maintenance’ which means that only the necessary maintenance work will be done in the mine. No further production will take place at the mine,” said Solidarity spokesperson Jaco Kleynhans.
Solidarity said that nearly 162 employees were expected to stay on to do the basic maintenance on the mine while the other 1 013 employees would presumably be retrenched by January 11.
“The retrenchment process will place the more than 1 000 employees in an economical crisis. According to our calculations, the more than 1 000 employees being retrenched will lead to more than 8 000 dependants being left without an income by January 2009,” said Kleynhans.
Edited by: Mariaan Webb