Seriti Resources, a major South African coal mining company, announced plans to carry out up to 1137 layoffs at two opencast operations, citing unsustainable financial performance, Bloomberg reports.
The affected mines, Middelburg Mine Services and Klipspruit South-East, have been struggling due to factors including the poor performance of state-owned rail firm Transnet SOC Ltd and volatile market conditions.
The company said the operations “are not currently commercially sustainable and require material restructuring to improve unit costs.”
Seriti’s decision comes as coal prices have plummeted almost 70% since their peak in September 2022. Transnet’s struggles have further exacerbated the situation, leading to a significant decline in coal shipments to the country’s main export terminal.
Seriti’s CEO, Mike Teke, acknowledged the impact on workers and local communities but emphasized the company’s commitment to fulfilling coal supply obligations to state-owned utility Eskom, inland customers, and export markets.
“We recognize that this exercise will negatively impact our workforce and local communities,” Teke said in a statement.
The National Union of Mineworkers (NUM) has condemned the job cuts, accusing the company of replacing employees with contractors and vowing to organize a “massive mobilization” to stop the process.
Seriti has initiated a Section 189A process, beginning consultations with workers regarding the outlined job cuts across the operations and corporate services team.
