Acacia Mining Cuts 1,050 Jobs in Response to Gold Price Slump
03 December 2015 - 7:42PM
Dow Jones News
By Alex MacDonald
LONDON--Tanzania's largest gold producer Acacia Mining
PLC(ABGLY) said Thursday it is cutting 1,050 jobs, or about 27% of
its workforce in an accelerated bid to cut costs and boost cashflow
given a protracted slump in the price of gold.
The U.K.-listed miner, formerly known as African Barrick Gold
PLC, has been restructuring its operations for several years to
focus on mining more proftiable ounces of gold at a lower cost.
The company has focused on mechanizing its flagship Bulyanhulu
mine and boosting the operational performance of both its North
Mara and Buzwagi mines as it grapples with a gold price that has
fallen to $1,051 a troy ounce as of Thursday compared with a record
intraday high of $1,907 an ounce in 2011.
Acacia said the majority of the affected employees have either
left or are expected to leave Acacia over the next few months
through a combination of voluntary separation agreements and
redundancies. The largest portion of the cuts will come from
Bulyanhulu, but all its mines and offices will be affected. The
company is providing support services to assit those affected.
"The steps we are announcing today are not taken lightly," said
Chief Executive Brad Gordon. "These, and the other planned changes,
will help to ensure that we are able to generate sustainable
positive free cash flow in 2016 and beyond, and do not experience a
recurrence of the unacceptable cash outflow we saw in Q3."
The restructuring is expected to lead to $25 million in annual
savings, excluding a restructuring charge of about $11 million to
be predominantly incurred in 2015.
Acacia, which is majority owned by Barrick Gold Corp. (ABX), is
also working to further refine capital expenditure, renew
discussions with contractors and major suppliers to improve their
rates, rationalise corporate administration spend and ensure
community spending is in line with corporate strategy and
sustainable development.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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(END) Dow Jones Newswires
December 03, 2015 03:27 ET (08:27 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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