Labour

AngloGold Ashanti's Savuka operation in South Africa (formerly West Deep Levels West mine) has been a source of employment and income for thousands of employees and their families since the 1960s, with much of this spent in the local community and rural areas. Savuka has also subscribed to the practice of providing job opportunities for employees' children, giving them the chance to take up where their fathers left off.

For some time Savuka's costs have consistently exceeded its revenues. In 2003 it became apparent that right-sizing was inevitable, and as part of this, it was planned to reduce the labour complement by 40% - 1,800 people out of a total of some 4,500. Current life-of-mine plans will see Savuka continuing at this reduced level until 2007.

Given this scenario, management and labour had to develop a strategy that would be beneficial for both the company and employees, ensuring the financial feasibility of Savuka for as long as possible on the one hand, and minimising the resulting trauma on employees on the other.

The planning process was guided by the Retrenchment Agreement in place at the mine. There were two roleplayers in the downscaling process, following the guidelines of the Labour Relations Act - National Union of Mineworkers (NUM) and the United Associations of South Africa (Uasa). This pre-downscaling consultation phase commenced in 2003, and focused on mapping a route going forward. Given the mature relationship between labour and management, no major hiccups were experienced.

Agreement was reached in 2003 on a number of key elements, including extended unpaid leave, voluntary separation packages, transfers, early retirement, the replacement of contractors, the application of the last-in first-out principle, and skills training, provided by an external agency in consultation with the Department of Labour.

The process has been overseen by an advisory committee - known as the Future Forum - which comprises four individuals from the unions and a community representative who is also an employee of the mine. When the next phase of labour reductions starts in the latter part of 2005, regular meetings of the Future Forum will be re-instituted. The mine found that the Future Forum was crucial in this process, ensuring its fairness, interviewing employees for possible transfers, and in providing advice on skills training and ensuring that the skills training actually took place. Skills training will assist the retrenched employee to re-enter the labour market.

Agreement was reached on a Social Plan, providing for skills training and broadly covers ways of avoiding retrenchments, preventing displacement and providing for compensation. The Social Plan Agreement was signed by both NUM and Uasa, and was subsequently scrutinised by both the Department of Labour and the Department of Minerals and Energy.

Amongst the challenges currently being faced is the maintenance of production output over the next three years, without which the closure could potentially be brought forward. At the same time, it has sometimes proved difficult for employees to maintain a positive morale.