Win-win solutions for Harmony and its stakeholders

In April 2010, Harmony announced that, following a review of the performance of its Harmony 2, Merriespruit 1 and Merriespruit 3 shafts (all part of the Virginia operations); these assets no longer held any payable reserves and the company began arranging for their closure. The closure process, however, inevitably affected the approximately 3 700 employees who had contributed to the past success of the shafts, and Harmony embarked upon an active drive to mitigate the effects of this.

In consultation with the National Union of Mineworkers (NUM), UASA and Solidarity, and under the auspices of the commission for Conciliation, Mediation and Arbitration (CCMA), Harmony announced a ground-breaking job preservation and profitability agreement in May 2010. In terms of the agreement, which will ensure that job losses are limited to under 1 000, certain sections of the Virginia operations' Merriespruit 1 shaft will continue to operate, provided these sections do not make a loss (on a total cost basis, including any capital expenditure) for two consecutive months, and that total costs remain under R250 000/kg.

"Generally, we've been able to avoid a lot of the retrenchments,” says Harmony CEO, Graham Briggs. “We've had surprisingly few ‘compulsory' retrenchments, quite a few voluntary retrenchments and my expectation is that, if we were to close within the next three months or so, we'd probably be able to transfer more than half of the 1 400 people to our existing operations.” Harmony’s Phakisa, Doornkop and Kusasalethu mines are among Harmony's dozen operations in build-up phase and in need of employees.

Alternative solutions that have been implemented to assist in this process include the offering of portable skills training and early retirement to employees.

The innovative agreement between Harmony and the unions points to their excellent relationship, and to Harmony’s commitment to safeguard the livelihood of its employees. With these key relationships and steps in place, we believe a workable solution with each and every employee can be reached.