IAMGOLD Corporation (IAMGOLD), announced on Tuesday, Oct. 18, that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. (Zijin) to sell its 95% interest in Rosebel Gold Mines N.V. (RGM). In January of this year, IAMGOLD announced that a strategic review would take place for RGM, which would include looking at the option for sale. The strategic review had to take place because, among other things, IAMGOLD is currently facing a budgetary gap for the Côte Gold project in Canada, which makes new investment in the RGM operation particularly difficult.
Making RGM profitable again requires material capital investments to implement projects and initiatives aimed at solving current challenges. According to the updated mine plan for RGM that was filed in January, RGM will require investment of over $440 million in development and sustaining capital over the next 3 years to return the mine to being a 300,000 oz/yr producer in 2025. During this time of reinvestment, the mine will not produce profits and will be a user of capital. Capital investments over the remaining LOM are estimated at $1.2 Billion. Michiel Fleischeuer, General Manager of RGM, emphasized the importance of the next step after the sale is completed. "The new investor has not yet reached the ultimate goal with the purchase of the company. A considerable amount of capital is needed to continue the RGM operation and secure the labor positions. Due to its capital constraints, IAMGOLD is restricted in its ability to invest in Rosebel and does not currently have sufficient financial resources. Zijin has indicated that they will fund the capital for the acquisition, as well as the necessary investment funds needed to move RGM forward."
Consultation with the union (RGWO)
Several closing conditions still need to be met before the sale of RGM is final, which is anticipated in the first quarter of 2023. There have been a number of questions raised in the Surinamese community following the announcement. "We understand that questions come with change. There is also understandable concerns among RGM employees. Unfortunately, not all questions can be answered by RGM, because it concerns information which the new shareholder, Zijin, must provide. We have also shared this with the union within RGM," said Fleischeuer.
A meeting between RGM's management team and the Rosebell Goldmines Employees Organization (RGWO) was held on Friday, Oct. 21. Workers' questions that were referred to the RGM management team by the RGWO board during this meeting were relayed by IAMGOLD to Zijin leadership. Subsequently, a letter was provided to IAMGOLD on behalf of Zijin, which clarified certain matters for RGM staff. The following is text from that letter:
Statement Shaoyang Shen, Deputy President Zijin Mining Group
“Zijin Mining Group (Zijin) respects IAMGOLD Corporation’s achievement and its contributions to the development of local communities and economic growth in Suriname through the operation of Rosebel Gold Mine N.V. (RGM) in the past 18 years. As one of the largest metal mining companies in the world, Zijin also takes pride in our track record of providing strong employment opportunities to local workforce, as well as making impactful contributions to economic and social developments to the communities where we operate.
While we have just recently reached an agreement with IAMGOLD for the acquisition of its equity in RGM, we understand that there are questions and concerns from current RGM employees with regards to how Zijin will run RGM, and in particular its policies toward the current employees. We fully appreciate these legitimate concerns in light of the ongoing change of control and would like to take this opportunity to convey our message to all employees.
Zijin is a multinational mining group with operations in 13 countries across 5 continents with a mission to partner with host countries and local communities for building a successful mining business in an environmentally and socially sustainable manner. We are firmly committed to fulfilling our social responsibilities and have gained broad recognition for our common development philosophy, among which providing employment opportunities for local people is one of our top priorities.
Through our policies on Governance, Remuneration and Benefits, Diversity, Career development and Labor Rights, Zijin aims to ensure that every employee is treated with dignity and respect, while creating a harmonious, diversified, and high-performance workforce with zero tolerance of bullying, sexual harassment and discrimination.
With regard to current RGM employees, Zijin is committed to honoring every aspect of the agreements and contracts with RGM/IAMGOLD, including but not limited to all labor matters and training related arrangements, collective labor agreements and individual employment contracts.
After the acquisition of RGM, Zijin has no redundancy or retrenchment plans which may impact employee’s job security, and will endeavor to avoid such actions. As a matter of fact, we view the current workforce as extremely valuable for RGM and we count on them for a smooth transition and for the continuing success of the mines in the future. We also believe that more employment opportunities and better wellbeing could be expected to the local human resource market as Zijin aims to increase investment and improve production potential in RGM.
On behalf of Zijin’s management, I would like to take this opportunity to welcome in advance all the employees and every single current employee to become part of Zijin global family, upon closing of the transaction.
Zijin’s management team will soon be visiting Suriname and we look forward to meeting with workforce representatives and presenting who Zijin is, and will be happy to answer questions that they may have.”
RGM wishes to emphasize that Zijin has stated that it is acquiring the company because it has faith in RGM's potential and has the necessary financial resources to help the operation reach its full potential. It has also expressly stated its intention to invest in the operation, and that it is counting on the skills of the current employees. New investments in the operation could result in more growth opportunities and stability for RGM employees. RGM is aware of its social responsibility within Surinamese society, and remains committed to effective operations for the benefit of all stakeholders.