Contract mining will keep us on sustainable terms – Gold Fields …as it launches 25th anniversary

Although contract mining could leave workers vulnerable, it is only way to keep Gold Fields’ operations at Tarkwa viable, the company has said – reiterating that it did not see light at the end of the tunnel with its old business model.

“We believe in sustainability, and we actually review our business models every now and then. And where we were heading to, we didn’t see any light at the end of the tunnel, so changing the business model was the only way to sustain our business in Ghana.

“This decision brought an impasse between us and the union, but thankfully it is all over now. The union has withdrawn the case from court. We have started the contract mining and the good news is that we actually estimated about 80 percent of the people affected were going to be rehired – but as we speak, we have exceeded 85 percent,” said Alfred Baku, Executive Vice-President and Head of West Africa, Gold Fields.

The remaining 10 – 15 percent, he explained, are people who said they have had enough of mining and therefore do not want to get back into it.

Mr. Baku, who argued that the new model will enable Gold Fields to invest more in exploration and undertake high cost waste-stripping to expose more ore for operational sustainability, was speaking in Accra at the launch of the mining company’s 25th anniversary of mining operations in Ghana.

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Gold Fields’ decision to move its Tarkwa Mine to contract mining – a model wherein a third-party mining contractor with a partially or fully paid-off equipment fleet assumes operational and financial responsibilities over mining activities – affected around 1,500 workers, who were disengaged.

The decision was met with public outcry at the beginning of this year – particularly from the Mineworkers Union, which said it would deny its members certain benefits.

But Gold Fields, which also operates the Damang Mine – where a similar change to contract mining occurred in 2016 and it recently went into a joint venture with Asanko Gold – emphasised that the decision will position the company to extend the mine’s life-span.

“The change in business model is going to give more benefits to the country, host communities and shareholders. We will be able to give more opportunities in terms of employment, royalties and corporate taxes, and more benefits to the host communities as well more opportunities in term of returns,” he noted.

He added: “The future is exciting because we have lined up a lot of exploration activities. We believe that there is so much potential of the lease that we operate. We have set aside huge sums of funds for exploration.

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“We recently entered into a joint venture with Asanko, and we believe that is going to increase our footprint in Ghana.”

Commenting on the company’s 25-year of existence in Ghana, Mr. Baku noted that he looks back with a huge sense of pride, adding: “We are even more optimistic about the future. With the ongoing optimisation of our operations, our focus on exploration and the extension of our footprint in Ghana, we see a Gold Fields that is poised for greater things in the years ahead.

“Financially, we’ve paid around US$1billion in dividends to shareholders since the beginning of our surface mining operations in 1998. Of this amount, the government of Ghana – having a 10% ownership through a free-carried interest – has earned in excess of US$100million in dividend payments. In addition, Gold Fields has paid over US$1.2billion directly to government in corporate taxes and royalties. Let me hasten to add that even though we’ve been around for 25 years, the first three to five years was spent developing the mine,” he further stated.

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