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“Due to the current fluctuation in world gold prices, the company is failing to match the salary demands of its employees and the cutting of salaries will be starting this month,” said one worker familiar with the thinking of the management.
Metallon operates five gold mines in Zimbabwe. Metallon head of corporate affairs Mr Zenzo Nsimbi said the company was still working on how to deal with the fall in prices.
“We are aware of the issue, but we are facing a great challenge in terms of the fluctuation of gold prices,” he said in an interview yesterday.
“Some of the strategies we are implementing are aimed at cutting costs because at the moment we are working on an uneven balance sheet.”
The fall in the gold price is now being factored in gold mining companies’ balance sheets.
AngloGold Ashanti, the world’s third largest gold producer, last Monday revealed that it had taken a hit, predicting a write-down in the range of US$2,2 billion to US$2,6 billion, according to media reports.
The figure will be revealed in its financial results for the second quarter.
The company also said it would produce four million to 4,1 million ounces of gold this year, rather than the 4,1 million to 4,4 million ounces previously planned.
Newcrest Mining, Australia’s biggest gold producer, reported that it might take a charge of as much as six billion Australian dollars, which would be the largest in the gold sector’s history.
Harmony Gold, the South African miner, has also announced that it would write down the value of its Hidden Valley Mine in Papua New Guinea.
Online Reporter