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Harmony makes substantial progress with union negotiations as part of the Free State operations restructuring

Harmony Gold Mining Company Limited today announced that it had made a significant breakthrough in its negotiations with affected labour unions surrounding the proposed restructuring of Harmony’s South African Free State operations.

On 19 May 2005 Harmony announced that it had served section 189 restructuring notification on several of its Free State shafts at its South African operations. The process which potentially affects as many as 11 780 people was tabled as an ongoing response to the lower Rand Gold Price environment, continued operating losses, ailing reserves and a need for right-sizing.

The current 60-day notification process, which is technically more than halfway complete, made a breakthrough yesterday at the second formal facilitation meeting of the company and union negotiations in the process under the facilitation of the CCMA (Council for Conciliation, Mediation and Arbitration). Agreement has been reached with UASA and Solidarity Unions in respect of the implementation of the following alternative measures as ways to minimize the number of employees possibly affected by the restructuring:

  1. The transfer of employees to vacancies at Harmony’s other operations, which will include the replacement of contractors not involved in specialised work.
  2. The implementation of Continuous Operations (CONOPS) at Tshepong, Bambanani and Masimong 5, with the latter only implemented in six months. Finality on the premium to be paid for working CONOPS still needs to be reached with the Unions.
  3. The opening up of voluntary retrenchments for a period.

UASA and Solidarity further accepted management’s proposed restructuring of the Brand 3, Merriespruit 1 and 3, and Unisel shafts. The agreement will also extend the notice period of the restructuring of these shafts for a further three months to monitor and evaluate the implementation.

In addition, National Union of Mineworkers (NUM) in principle did not reject the above proposals. However NUM has requested additional time to study information supplied by Harmony pertaining to the restructuring, which has been agreed to.

The next meeting is scheduled for 28 June 2005, when feedback regarding the proposed alternative measures designed to minimize the number of affected employees will be tabled by the National Union of Mineworkers (NUM). We are hopeful that consensus will be reached on the alternatives proposed.

Harmony is the first gold mining company to negotiate and agree on a Social Plan with the National Union of Mineworkers. The Plan contains measures to improve productivity at the mines to ensure long-term employment and where retrenchments are certain to ensure that the affected employees have portable skills that will ensure continue employment in sectors outside the gold mining industry, or to enable affected employees to start their own businesses.

“We look forward to an amicable completion to the restructuring process that will allow for the creation of a more sustainable and prosperous industry, which can benefit all stakeholders and affected parties”. Swanepoel added.

For more details contact:

Bernard Swanepoel
Chief Executive
+27(0)83 303 9922

Ferdi Dippenaar
Marketing Director
+27(0)82 807 3684

Brenton Saunders
Executive, Investor Relations
+27(0)83 607 4060

Vusi Magadana
Investor Relations Officer
Office: +27 11 684 0149
Mobile: +27(0)72 157 5986
This email address is being protected from spambots. You need JavaScript enabled to view it.

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