About 400 workers at the Navachab Gold Mine have until today to decide whether to accept an offer for voluntary severance or retirement, or face retrenchment.
Workers at all levels of the company informed The Namibian about two weeks ago of the mine’s intention to roll out a retrenchment plan.
The workers have to make the difficult call of choosing between voluntary or induced retrenchment, with both choices bound to affect their only means of livelihood.
The town of Karibib, whose economy is heavily dependent on the mine, could also become a casualty of the development.
Over 750 people employed at Navachab live in the town of approximately 12 000 people, contributing to Karibib’s economy.
The mine also owns close to 240 houses in the town, making it a significant ratepayer.According to the workers, an internal memo was issued to inform them of the company’s plans to reduce costs.
The Namibian understands the company wants to cut its total salary bill by 20%. The workers have until end of business today to respond, after which Navachab’s board will decide the way forward.
If the targeted 20% reduction goal is not reached, retrenchments could follow, The Namibian was informed.
A source told this newspaper that the mine, which Navachab QKR Namibia – a conglomerate of international and local shareholders – bought for N$1,2 billion from AngloGold Ashanti in 2014, has been running at a loss since.
In order to reach the gold shaft, which is about 100 metres underground, the company has to invest another N$800 million.
"Once it hits that ore body, the mine will have a good source for continual operation and profits," the source said.Navachab’s managing director (MD), George Botshiwe, explained that mining operations are mostly long term, and therefore the investment of additional funds is imperative should any mine wish to efficiently and sustainably operate its business."With this in mind, it is also necessary to make certain strategic decisions impacting the continued operations of the company," he said.He added that the mine’s biggest challenge is the historical high cost of production.The offer of voluntary separation as well as voluntary early retirement packages to employees is part of this decision, the MD emphasised.Asked how the mine got into the predicament, Botshiwe said it is a culmination of a few factors, some of which the company had no control over, such as international prices, exchange rates and inflation."As a responsible contributor to the socio-economic development of the region, […]
