Dar es Salaam — Acacia Mining Company is executing what it says are "organisational changes" at its Bulyanhulu Gold Mine that will culminate in retrenchment of employees as the company cuts costs to remain afloat in the wake of the government's ban on concentrate exports.
This is the second time that the gold mining firm is retrenching workers since the government banned exports of mineral concentrates in March, 2017 in what President John Magufuli's administration said was a deliberate move meant to ensure that Tanzania gets the rightful share of proceeds from mining activities.
On September 4, 2017, the company announced a decision to reduce operational activity at Bulyanhulu largely due to unsustainable cash outflows at the mine as a result of the ban.
The ban, which has not been lifted to-date, has forced the company to stockpile output, resulting in a 29 per cent revenue drop last year (2017) and a dive in cash reserves.
Its full-year sales of gold reached 592,861 ounces, being 27 per cent lower than 2016.
Acacia Mining managing director, Mr Assa Mwaipopo, told employees via an internal memo that the company has been inviting suggestions for cost-cutting initiatives for the business including Voluntary Separation Package (VSP) proposals.
However, having received a limited response to the VSP application process, the company was forced to start consulting with employees who will be affected by the retrenchments.
"The company now regretfully finds itself in a position in which it must begin a consultation process on compulsory retrenchment. This consultation process will now take place and it is envisaged that the process will run until the 30 September, 2018," the internal memo, dated September 3, 2018, reads.
Mr Mwaipopo confirmed to The Citizen on Wednesday, September 05, 2018 that the statement was indeed his.
"The message in the memo is authentic... I only wonder how it found its way into some social media platforms while it was intended for internal use," he said.
Asked on the number of employees to be affected by the retrenchments, Mr Mwaipopo said he was not in a position to divulge more details other than what is in the leaked memo.
According to the Memo, the retrenchment exercise will be conducted after thorough consultation with employees directly or indirectly through their representatives.
Actual consultations, according to the memo, started yesterday, and would be conducted throughout the month of September.
"The consultations with employees or their representatives will be in accordance with applicable labour laws," the memo reads, noting that it will seek to address reasons for the intended retrenchment and measures to minimize the effects of the retrenchment process.
It will also outline the criteria to be used to select employees to be retrenched, timing of the retrenchment and severance pay and other payments applicable. During the first half of 2018, the company's gold production reached 254,759 ounces at an all-in sustaining cost (AISC) of $945 per ounce, with output on track for the top end of Acacia's target for the year. Acacia expects to mine between 435,000 and 475,000 ounces for 2018 at an AISC of $935-985 per ounce.
