Buffalo Coal this week issued further ‘dismissal notices based on operation requirements’ as the company continues to restructure.
Kevern Mattison, General Manager, said Buffalo Coal had issued the notices on Monday in terms of the Labour Relations Act.
“The emphasis in this process will be on restructuring rather than retrenchment. While there will be some resulting unemployment, at present we envisage no more than 15 waged employees would be left without a job.
“Whilst this is regrettable, it is a necessary step in order to protect the many hundreds of others currently employed by the company.”
Despite the restructuring concluded earlier this year, Buffalo Coal remains under financial pressure.
This is because of recent and continuing constraints at the main area of operation, the Magdalena underground mine (MUG).
“Magdalena has a high fixed cost base which, with the coal price at historic lows, requires the operation to achieve very high rates of production just to break even.
Magdalena has not been achieving those rates, and cannot be expected to in the current environment.
“Magdalena therefore continues to be loss making. Something must be done about it – and the general financial position of the company – in order for the entire business to be sustainable. The restructuring is aimed at reducing the risk related to Magdalena operations for the rest of the company and addressing Buffalo Coal’s overall financial position and to ensure the sustainability of the company.
“The current plan would address both these requirements while also allowing for mining to continue at Magdalena, resulting in the minimum possible impact on net unemployment.”