British Gold mining firm to cut Kenyan workers

[Photo: Courtesy]

British mining firm Goldplat has warned that it will shed some jobs with a planned "restructuring of labour" in its Kenyan operations as it seek to lower costs.

The company, which operates the Kilimapesa Gold Mine in Narok County, said it had concluded the installation of a more efficient gold processing plant that will result in some of its employees being rendered redundant.

Following the installation of the new plant, benefits accruing as well as the planned retiring of its old plant, the firm said it would undertake restructuring that could result in job loss.

Goldplat, listed on the London Stock Exchange’s Alternative Investment Market, has been mining and exporting gold at Kimapesa, with plans to expand to Migori County.

It did not specify the number of Kenyan employees that would be affected by the decision.

“The incumbent plant, Plant 1, will be closed. This major step forward will reduce overall production costs, allow gold recovery to be optimised and increase the life of the mine,” said Goldplat in the statement on Monday.

“Further cost savings will also be achieved through the restructuring of labour, although the closure of Plant 1 will not result in a significant reduction in labour numbers as employees will be re-assigned to other positions at Plant 2 and at the mine where possible.”

It added that the closure of its old plant would result in an initial reduction in production of gold at the mine over the quarter to June this year. The lower production will however even out the savings in costs following reduced operating costs.

“The closure of Plant 1 will initially result in a reduction in production during the last quarter with gold production for the year expected to be slightly below 5,000 ounces,” said the statement. 

“Management however believe that the changes in production will positively impact profitability at Kilimapesa that will be reflected in the results for the quarter, due to the lower production costs per ounce at Plant 2.”

Gold output and earnings more than doubled last year following a change in policy that resulted in the removal of a surcharge on licences.

Earnings from the commodity reached Sh1.5 billion in 2017, from Sh652 million in 2016, according to data from the Kenya National Bureau of Statistics.