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Is Obuasi becoming a ghost town?

miningThe news from Obuasi, home of Anglogold Ashanti’s mining operations, is not palatable. Barely two months after 430 workers were sent home from the mines, its management has reportedly given verbal notice of full closure of the mine, which would necessitate the sack of an additional 1,000 workers.

Aware of the dire consequences of such an outcome on them, traders in Obuasi are looking at the possibility of re-locating their businesses out of the town. The attraction of the town to business is of course the purchasing power of its workers. Take that away and the town would lose its luster.

The Ghana Mine Workers Union confirms receipt of the verbal notice, but that they were awaiting a scheduled meeting between the management and the workers on the issue, with a promise to ensure that the workers were treated properly.

“Yes, they’ve hinted us but what I can assure you is that we will examine the proposal very well and ensure that workers get the best offer should an official correspondence get to us”, GMWU Chairman Kwaku Mensah Gyakari told The Chronicle.

Production in the Obuasi mine’s open-pit and deep-cast operations have both been said to be declining since 1995 and 1998 respectively. For this, management has proposed full mechanization, which inevitably would lead to some gradual retrenchments, but not the hurricane Katrina that is threatening.

“In the short-term, we intend to right-size the operation and in the medium term to transition the operations to a modern productive mine. The transition to mechanization will, regrettably, also result in a phased process of retrenchments over the next two years, due to a combination of decline in gold price, increase overall labour costs and the increase in other input costs such as power and materials.

“AngloGold Ashanti is mindful of the impact this process would have though it remains necessary to create a sustainable operation that is able to sustain high-quality jobs and support the economy for decades to come”, AGA Senior Vice-President Ghana Mark Moncombe said in a presentation in Obuasi last year.

What seem to have broken the camel back, the immediate cause of the panic, is the effect of the 25 percent fall in Gold prices last year and its continuing effect on profitability.

The Chronicle’s banner headline of Friday, January 17of “Obuasi Mine Faces Closure” said management was considering closing down the mine if production fails to rise within the next two months.

If it is a matter of increasing production, The Chronicle would urge the AGA management to consider instituting a double-shift schedule at both operations in consultation with the union.

Additionally to improve cash flow we would suggest a cut in salaries across board – from the board through management to the general staff. In temporary crisis situations such as this, workers unions prefer to make sacrifices for continued employment to being retrenched en-masse.

Such an outcome would husband the money that would have been paid out to the 1,000 pencilled down forsack and make it available to be ploughed back into production.

The salary cuts could be paid back when mechanization is completed, a compulsory savings of sort. Of course, it should be added to the pay-off of those who would fall victim to the phased retrenchments.

Obuasi is too historic a town for AngloGold Ashanti for it to be abandoned through acts of commission and omission. Please, let us reconsider!

The Chronicle  January 20, 2014

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Posted by: Ghana News -SpyGhana.com

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