The Trades Union Congress (TUC), at its second bi-annual General Council meeting held on the 21st and 22nd December, 2017, has pledged their unwavering solidarity and support with the Ghana Mineworkers Union (GMWU) over the proposed retrenchment of some 2,150 workers of Goldfields Limited at the Tarkwa and Damang mines.
The TUC described the proposed retrenchment by Goldfields as a demonstration of bad faith since it is in breach of the mining Development Agreement the company signed with the government in 2016.
Given the already precarious employment situation, the TUC and its 18 affiliate national unions were horrified by the news that “a company that has gained so much from the very generous fiscal incentives made available by our mining laws, and have consistently recorded colossal profit margins over the years, could contemplate such heartless measures”, Secretary-General of the TUC, Dr. Yaw Baah told a section of the press.
Facts available to the TUC indicate that Goldfields intends to pursue a contract mining. The initial estimate of the company was that this alternative mining option would lead to the retrenchment of about 1,500 of its employees. But the latest number of workers cited in a letter written by lawyers of goldfields astonishingly puts the number of affected workers at 2,150 out of a total workforce of 2, 516 (including management staff).
“We find this extremely unfortunate considering the extent of contradictions and inconsistence in the company’s justification for the proposed retrenchment”, Dr. Baah added.
Goldfields justified the decision to undertake contract mining and subsequent retrenchment on two grounds. First is the Life of Mine which the company claims the life of its Tarkwa mine stands between 5 and 6 years, implying the mine is nearing its lifespan.
However, the claim is unsupported by facts posted on Goldfields’ website, and the company’s audited Mineral Resource/Reserve report. Among other things that the Life of Mine as at December, 2016 stood at 15 years and 14 years, if the current reserve of 6.1 million is depleted by its projected 2017 gold production of 545,000 ounces.
The second justification was in respect of what is called ageing fleet. Goldfields says mining equipment is ageing and nearing operational lifespan. TUC’s analysis indicates that over 80 percent of the current fleet is operating below original equipment manufacturer Life of 60,000 hours and extended Life of 72,000 hours. This means the current fleet can run for several years.
In 2016, Goldfields proposed and secured a Development Agreement with government in respect of its Tarkwa mine. The agreement was signed on March 11, and ratified by Parliament on March 17. As part of the agreement, the government committed to grant further fiscal incentives provided under the mining lease held by Goldfields.
Specifically, government agreed to reduce the corporate tax rate, which stood at 36 percent for all mining companies to 32.5 percent for Goldfields. Royalty was also reduced from a flat rate of 5 percent to a range between 3 to 5 percent, indexed to gold price spanning 11 years. According to Goldfields, these and other fiscal concessions would save the company up to USD33 million a year effective 2016.
One year on, and these generous fiscal and other concessions, goldfields has the temerity to disregard its own commitment and promises and propose this insensitive retrenchment programme in which 2,150 workers will lose their jobs and livelihoods, Baah added.
Dr. Baah stated that the TUC together with GMWU will ensure that the plight of mineworkers is not toyed with, and that the TUC has taken up the matter, and is going to the bottom of the matter to ensure mineworkers are protected.
He stated that out of frustration they have gone to court to seek some reliefs to which judgement is on January 10. He said he hopes goldfields sees reason and engages the union because retrenchments have happened in the past, but in a civilized manner.
The General Secretary of GMWU, Prince William Ankrah, said GMWU is contesting the illegal contract mining business model which is meant to exploit mineworkers because invariably, they are paid less. He said capital allowances are given to these multinational firms to operate freely and that Ghana needs to benefit from mining receipts.