November 27, 2008 / 12:26 PM / 11 years ago

UPDATE 1-SAfrica's Simmers may lay off 500 workers at mine

(Adds details, CEO quote, share price)

JOHANNESBURG, Nov 27 (Reuters) - South African miner Simmers & Jack SIMJ.J may lay off 500 workers at its Buffelsfontein Gold Mine (BGM) within the next two months if it fails to meet output targets, it said on Thursday.

Simmers had said earlier this month that BGM would focus on margins and take tough measures at sections of the mine that did not contribute to cash flow.

The company said it faced unprecedented increases in the costs of mining and milling materials, while it had spent large amounts of capital since 2005 to ensure that the mine had the infrastructure to produce according to plans.

“In the current economic climate it’s essential that all sections produce optimally,” Simmers Chief Executive Officer Gordon Miller said in a statement.

Simmers said this optimisation process was aimed at those sections of the mine that needed to improve operating margins, including No. 12 shaft and smaller parts of the mine’s six other operational shafts.

Its six operating shafts include the high-grade No. 5 shaft which is being refurbished and is on track for completion in March 2009, the company said.

The bulk of the mine’s underground production currently comes from the No. 6, 7 and 8 shafts.

Simmers & Jack said last month it would build up it projects more slowly and selectively due to the global credit crunch.

Shares in Simmers lost 2.05 percent to 1.91 rand, against a stronger All Share Index .JALSH and a 4.13 percent rise in the gold sector index .JGLDX. (Reporting by James Macharia, editing by Anthony Barker)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below