Failure to implement an optimisation plan could lead to the retrenchment of 500 people at Buffelsfontein gold mine, mine owner Simmer and Jack said yesterday.

Failure to implement an optimisation plan could lead to the retrenchment of 500 people at Buffelsfontein gold mine, mine owner Simmer and Jack said yesterday.

"Failure to conclude an optimisation plan could result in the retrenchment of about 500 people within the next two months," the company said.

Simmer and Jack said the company would focus on its margins and take a far stronger line on those sections of the Buffelsfontein mine that did not contribute to cash flow. "The plan will be implemented as soon as possible," spokeswoman Gail Strauss said.

"We've got to improve productivity and to cut costs at the mine, so shafts that are no longer producing must do so, and they must do so within budget," she said.

A Section 189 (a) notice to organised labour in terms of which the mine would begin a consultation process "aimed at optimising the business and ensuring that production targets were met" had been issued.

"We've had very constructive talks so far with the unions at mine level and these talks are ongoing," Strauss said.

Simmers' chief executive officer Gordon Miller said the mine was experiencing "unprecedented increases in the costs of materials required for mining and milling and management intended to engage all stakeholders to ensure the long-term sustainability of Buffelsfontein gold mine".

He said considerable capital had been invested since 2005 to ensure that the mine had the necessary infrastructure to produce according to its Life of Mine Plan. - Sapa