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Thirthy-nine Gough Group employees working at Macraes gold mine are to be laid off next Friday and more job losses could follow at other contracting firms around the region as a result of cost-cutting measures by Oceana Gold.
Gough staff were informed of the cuts at a meeting at Macraes Flat, at the same time as Oceana Gold staff in Palmerston, on Tuesday afternoon.
However, many of the other major contractors at Macraes were surprised and left reeling after hearing of Oceana Gold's staff cuts. In one case, a business learned of the decision in yesterday's Otago Daily Times.
Gough Group chief executive Karl Smith said 39 on-site mechanics who serviced vehicles at Macraes would be laid off at the end of next week.
While the job cuts were upsetting, he said there was an ''upside''.
''I think the reality for anyone involved in [gold] mining around the planet is the drop in gold prices is having a major impact.
''The upside is, we will do everything in our power to relocate our staff. I guess if there's any silver linings in this situation, this is it.''
Mr Smith said the group had about 50 vacancies in its New Zealand network, and hoped to fill the positions with employees from Macraes.
''We'll move people if they are willing to go, and pay for their removal costs.
''That's our major focus at the moment.''
Goughs had been working at Macraes since 2002 when it signed a $180 million contract to supply Caterpillar equipment, parts and services.
The order was the largest single one placed with Goughs.
The job cuts at Goughs came as a direct result of an announcement by Oceana Gold on Tuesday that it would be cutting its open-pit workforce by more than 100 staff over the next two years.
Oceana Gold managing director and chief executive officer Mick Wilkes said the prolonged drop in the gold price had forced the company to reduce costs. Amalgamated Workers Union New Zealand secretary Calvin Fisher said
Goughs would not be the only contractor in Otago to feel the impact of the cuts. He said at least half a dozen major companies were still to inform employees of the impacts. SGS New Zealand business manager Hugh McMillan said the laboratory testing company was surprised to learn of Oceana Gold's decision and it was investigating what impact it would have on the business.
SGS had 30 staff at Macraes providing a range of services. A Joyce's Contracting spokeswoman said the machinery hire company was also reviewing its position after reading of the cuts in yesterday's ODT.
She said Joyce's employed about a dozen staff at Macraes.
East Otago High School principal Lennox Sharp said the impact of the job losses would probably filter through the community to school rolls in the area - although it was unknown at this stage how much it would affect his school. If rolls declined significantly, it could result in the loss of teaching staff.
Oceana Gold senior financial analyst Nova Young said the ''re-optimised'' Macraes mine plan could affect about 25% of the company's 560 workforce, which included contractors.
Following consultation, a final decision on the number of jobs affected would be made later this month.
Ms Young said the company would continue to consult employees at Macraes and other relevant third parties and discuss alternative employment arrangements with staff directly affected. The idea of re-hiring staff, if gold prices increased again, was not discounted.
''As part of our normal course of business, we will continue to ensure that our business operates as efficiently as possible without compromising health, safety and the environment, and we will continue to seek and evaluate suitable opportunities.
''We regularly review our mine plans, which are also dependent upon the gold price, and will make any necessary adjustments accordingly, in order to sustain operations.''
• 560 staff at Macraes, 106 in the open pit may be over the next two years.
• About 50 Gough Group staff at Macraes, 39 to be laid off by January 17.
• Final decision on job losses to be made later this month.
• Between 180,000 and 210,000 ounces of gold expected to be produced in 2014.