Petra Diamonds will ax approximately 468 workers at its Cullinan and Finsch mines in South Africa, according to a local union.
The National Union of Mineworkers (NUM) believes the company is looking to replace many of its permanent employees at the two deposits with contract labor, which will be cheaper to maintain, it said Thursday. The reasons for the staff cuts are the challenging global diamond market, upcoming debt refinancing, operational underperformance and the need to reduce costs and restructure, which are heavily weighing on the company, according to NUM.
“The NUM believes these justifications are pretexts to sacrifice workers and shield executives for accountability for operational failures,” the union said.
NUM submitted a proposal to Petra with a plan to save the company ZAR 6 million ($329,682), which it believes would help the company avoid the layoffs, but Petra rejected it, the union claimed. Meanwhile, Petra has signed a memorandum of understanding (MoU) with NUM, providing for a ZAR 10,000 ($549) relocation allowance for affected workers as well as a 12-month recall clause, giving the former employees priority should the company rehire staff.
The union has asked the government to hold “urgent” meetings with mining companies and labor unions to address the “crisis” facing the South African diamond industry.
Petra Diamonds had not responded to a request for comment from Rapaport News at the time of publication.
Image: Workers performing an inspection at the Cullinan mine. (Petra Diamonds)
