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JOHANNESBURG — Kinross Gold Corp., dogged by protests and controversy after dismissing nearly 300 workers at its Mauritania gold mine, insists that the layoffs will help safeguard its future at one of its highest-cost operations.
The Toronto-based company, one of the world’s 10 biggest gold producers, is in a serious cost-cutting drive after writing down much of its $7.1-billion cost of acquiring Red Back Mining, owners of the Tasiast gold mine in Mauritania.
But after announcing the layoffs at its mining operation in the West African country last month, Kinross has faced lengthy and bitter protests by the laid-off workers and their supporters. The protests have continued for weeks, triggering a heavy-handed police crackdown.
About a dozen protesters were arrested and a similar number were injured when the police raided the protest last week, according to local reports. Kinross will not comment on the police raid, but it has defended the layoffs, calling them a “difficult but necessary response” to ensure the future of the mine.
“Tasiast is one of the highest-cost mines in our portfolio and we have had to make some difficult decisions in response to the recent decline in the gold price,” said Steve Mitchell, the company’s vice-president of corporate communications.
Canadian activists say the layoffs in Mauritania are an example of the reasons for skepticism about the federal government’s strategy of using Canadian mining companies as a tool for economic development in Africa and other developing regions.
The Harper government is spending $15.3-million over the next five years on an African Mineral Development Centre to help create jobs and reduce poverty in Africa. The centre was launched last month in Mozambique with Canada as the founding donor. The government is also funnelling millions of dollars in foreign aid money to Canadian mining companies in Africa and Latin America to help them in local community development.
But critics such as MiningWatch, an Ottawa-based advocacy group, argue that the Mauritania layoffs and the police crackdown on the protesters are examples of how the mining industry is the wrong tool to use in African development. They say the industry is too dependent on volatile mineral prices and the boom-and-bust market cycle, and too likely to trigger social conflict and violent repression in poor countries.
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