South African miners work a rock face in this May, 1998 file photo.Peter Andrews/Reuters
First Uranium Corp. says it may have to trim 1,850 jobs at its Ezulwini mine in South Africa – about half the work force there – in a move to improve profitability and cut operating costs.
The TSX-traded company, which operates in South Africa, said early Monday it needs to reduce its work force at the mine outside Johannesburg to optimize cash flow and overall profitability.
The announcement, which the company called "unfortunate" less than a week before Christmas, is part of the company's strategic review announced in July.
First Uranium said it will consult with employees to minimize the job losses at the operation, which currently employs about 3,745 people.
"This is a necessary step if we are to safeguard the considerable investment made to date in this operation and the future sustainability of the mine," said First Uranium president and CEO Deon van der Mescht.
"For the past nine months, the Ezulwini Mine has been the subject of an intensive turnaround process," he said.
First Uranium has been plagued by fatal accidents at the uranium mine this year and said it has "devoted significant resources to position this operation to achieve the production levels necessary for it to be profitable."
"The extremely unfortunate fatal accidents in the latter half of the calendar year have had a significant impact on employee morale and productivity, and as such the expected improvement in production has not been forthcoming."
The company said its decision does not affected its Mine Waste Solutions tailings recovery operation, also in South Africa.
"While the company continues to believe in the inherent value and potential of the Ezulwini Mine, decisive action is required in order to stem ongoing operating losses, Mr. Mescht added.
"Although it is the holiday season and the timing is unfortunate, management has determined that action must be taken now to mitigate the effects of the Christmas shutdown and provide employees with an opportunity to increase productivity levels while reaching a consensus around the nature and scope of changes necessary to implement the new operating plan."