Resources Correspondent
GOLD mining company Durban Roodepoort Deep is to retrench 1000 workers in a restructuring aimed at maintaining profitability at certain SA operations.
Margins have been pressured as a result of the rand's rise against the dollar. Durban Deep reported a 95% drop in net earning in its third quarter. Net income slumped to R10,5m in the three months ended March 31 from R215,1m in the previous quarter.
Analysts said the strong rand could not be viewed as the only reason for the slump in Durban Deep's earnings. It had " poor assets, many of which are too marginal", said one. "It should have been planning for more robust projects.
"You can't blame the rand and expect it to make up for poor operational management."
Durban Deep's North West operation, which includes the Harties and Buffels mines, recorded a cash operating loss of $2,4m.
CEO and chairman Mark Wellesley-Wood said yesterday that Harties had consistently failed to meet its target, and the company planned to restructure its whole North West operation.
To reduce costs, jobs will be cut. Durban Deep said it had notified the National Union of Mineworkers about proposed retrenchments. Services between the North West operations and Blyvoor were placed under one management. Services like health care would be outsourced.
Wellesley Wood said that there would be an integration of operations at Harties and Buffels, and 1000 would be retrenched.
Apr 30 2003 06:47:42:000AM Julie Bain Business Day 1st Edition
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