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AngloGold’s Mass Layoffs Halt Gold Mining in Mali

AngloGold’s Mass Layoffs Halt Gold Mining in Mali

After more than 400 workers have been dismissed this year, tensions have risen between employers and unions of the AngloGold Ashanti managed Sadiola and Yatela gold mines, located in the largest city of Mali’s Western region, Kayes.

The Sadiola and Yatela gold mines are the biggest employers of this semi-arid Malian area where people from different parts of the country have managed to find jobs. However, miners’ anxiety about their employment is far from an end, given that 600 additional workers must soon be dismissed — according to unionists who went on strike in early February and demonstrated in the streets of Kayes.

Striking Vs. Following the Rules

“Instead of going on strike, we decided to follow the initiative of the governor of Kayes who is making efforts to bring both parts around the table of negotiation,” National Union of Mineworkers member Mamadou Berthe told AFKInsider via phone.

The unions are now asking employers to stop mass lay-offs, although they are aware of the challenges of the mining sector.

“If they want to pursue the lay-offs, they must protect those who lose their jobs with a real social plan,” said Berthe.

Gold Price Drops on the International Market

According to François Philippart, a member of AngloGold’s commission for the lay-offs, the current situation is due to the drop of gold value on the international market, which began slipping in September of 2013. In Yatela, one of the two mines, exploitation has been suspended because of security reasons, in addition to the down fall of gold prices.

While employers say gold reserves are no longer sufficient in Yatela, mining activities are now concentrated within two-thirds of the Sadiola gold mine. AngloGold Ashanti decided to focus mining activities on this site, because minerals are supposed to be more adapted to the existing factory.

The shift in exploitation methods — targeting geological particularities — is also linked to gold value on the international market. It will surely have an impact on the security of employees’ jobs, but according to Philippart any staff reduction will be done in accordance with Malian law.

Belco Tamboura of the Mali Chamber of mines told AFKInsider that mass lay-offs are critical issues for local development as an important number of communities depend on industrial mining.

“Many youngsters benefited [from] a program of employment facilities. So, several villages may be affected by a wide-scaled lay-off,” he said.

Despite many efforts that have been made to diversify the local economy, Mali’s communities are not well prepared to resist a possible end of gold mining. The agriculture potential of the villages surrounding the mines has been developed as investors helped the municipalities to introduce a drought-resistant rice variety, according to Tamboura.

Unfortunately, agriculture and cattle growing doesn’t interest many local people who make a living by way of economic activities indirectly linked to the mines.

“Beyond building health centers, schools and roads, several businesses like trading have been developed in the region and around the mines,” Tamboura said.

The employees, as well as local communities, will be informed about announced lay-offs, meanwhile, negotiations may remain tense as Philippart considers the unionists’ demand for social plans irrelevant to Mali national legislation on labor.

Illegal Mining and International Investors 

“Other gold mines run by international investors experienced lay-offs in the past. But this is the first time threat exists for about one thousand workers,”said Oumar Sidibe, a lawyer based in Bamako.

The tension between the miners and their employers open a new area for the Malian gold mining sector, which didn’t face such a crisis since international investors came into the country.

While the mines — run by international investors who pay taxes and contribute to local economy organizations — face difficulties, illegal mining is thriving in Mali. According to Sidibe, a new illegal mine opens at least every week luring youngsters to abandon farming and cattle breeding in the villages.

A survey of Mali Chamber of mines in 2012 indicates that about 2 million people are involved in illegal mining, especially youngsters from rural places. Many children are also involved, according to a report released by Human Rights Watch (HRW) in 2012. The report says that 20,000 to 40,000 children work in dangerous conditions in those illegal mines.

Though the lay-offs represent economic challenges for international investors, industrial mining isn’t threatened, according to Mali Chamber of mines. Up to 80 percent of Yatela gold mine is detained by Sadiola Exploration Limited, which is a joint-venture between Anglogold Ashanti and IAMGOLD.

The End of Gold Mining?

The Malian government owns 20 percent, while it owns just 18 percent of the second gold mine Sadiola, another joint-venture including Anglogold and IAMGOLD — both which own 41 percent.

“I don’t think the lay-offs in Sadiola and Yatela announce the end of expansion time for AngloGold and the international investors,” Alou Camara, an economist based in Bamako told AFKInsider. “They are present in other gold mines in Mali and are continuing to expand their scope.”