About 550 workers at Vatukoula Gold Mines Ltd (VGML) have been told “payment of wages will not be guaranteed” at the end of September if 500 ounces of gold isn’t produced every week this month.
VGML General Manager Li Jiangwu informed workers on August 25 in an internal company memo that VGML had produced 11,000 ounces of gold from January to July, which was an average of about 400 ounces per week.
“If we continue at this production rate, we are bound to close our doors,” he stated.
“The most important crisis we face is working capital. Without this working capital, we are unable to move an inch.”
In the memorandum, Mr Li tells VGML staff that if the company can produce 500 ounces of gold per week in September, it could meet its gold sales commitments on September 15 “in addition to payment of fuel purchases and payment of wages”.
“However, there is a shortfall of $US520,000 ($F1,162,000) around September 29 and payment of wages will not be guaranteed.
“Therefore, we must increase production to 100 oz per day in order to ensure safe cash flow for the company to allow all employees to live and work in peace.”
Mineral Resources permanent secretary Dr Raijieli Taga was sent a list of questions on Thursday and yesterday in regard to the internal correspondence released by the VGML management.
“As of right now, we choose not to comment. The team plans to visit the company soon and then we will be better prepared to send you a response,” stated a Ministry response.
No comments could be obtained from the National Union of Workers secretary general Felix Anthony, which represents workers at VGML.
