Although Ergo was an extremely profitable operation for many years, it has run at a loss since 2003, and final closure is planned for March 2005. The loss-making operation of the plant since 2003 has been justified on the grounds that reclamation activities still produce substantial amounts of gold at the same time as contributing to environmental clean-up, as well as to longer employment and a well-planned closure process.
Ergo's labour complement at year-end numbered 770 employees and 1,100 contractors.
A Social Plan was implemented four years ago, in consultation with trade unions. Through interviews and questionnaires, the company assessed the training needs and preferences of employees so as to facilitate employment post closure. Of the 900 employees included in the original survey, 729 indicated their specific training preferences, which ranged from arts and crafts to building, construction and engineering. Carpentry, plumbing, refrigeration and chicken-rearing classes were run in conjunction with the Department of Labour.
To date, some 500 employees have completed their training. Senior human resources manager Chris Wiseman comments, "Ergo's approach was to a certain degree unusual. Most companies implementing skills development programmes only do so after closure. We embarked on the training as soon as the needs analysis was complete. Although the intention behind this was good, costs increased significantly due to catering for labour replacement while employees were attending in-service training. The initial budget was some R2.5
million ($390,000), which has probably doubled if labour replacement costs are taken into account. There is also the risk that people forget the skills they have acquired if there is no immediate opportunity to put these into practice."
Some 220 employees remain to be trained until closure. "Progress has slowed recently, because it was possible in the earlier stages to put together large groups of trainees for the most popular subjects. We are now faced with groups of two or three employees with individual preferences, and it becomes difficult to source providers," says Ephraim Ralesekele, National Union of Mineworkers (NUM) branch chairman.
The process of obtaining new jobs for those affected can obviously only begin once operations have ceased. "Ergo is a unique operation, so this will not be an easy process," says Ralesekele. "Impala Platinum Refinery, situated in Springs, has similar requirements and a number of employees have applied there."
Regular communication with employees has continued, and the final 20 workplace road shows were held in September and October 2004.
A number of employees also expressed interest in life-skills and small business development training. AngloGold Ashanti's Small and Medium Enterprise Development Initiative (SMEDI) facilitated workshops and advice sessions on starting a business. 60 people have attended training supplied by the Springs Business Linkage Centre, developed jointly by the centre and Impala Platinum.
"Most employees have now come to terms with the reality that Ergo must close," says Ralesekele. "From the counselling sessions, financial problems emerged as the most pressing issue." To counter this, Ergo retained the services of Edutouch, a company offering finance guidelines and business advice. Two workstations, offering an audio-visual interactive programme in English, Zulu and Sepedi, have been installed.
"Take-up has been rather disappointing," says Wiseman, "but we are planning to move the machines from the training centre and administrative block into the workplace, and will also try and improve the level of facilitation." It is planned to extend the financial training intervention to the families of affected employees. Approximately 100 people have expressed interest in such training, which will be handled by Joe Mosehle, social plan/employment equity officer, in the period leading up to the operation's closure.