JSE-listed gold producer, Sibanye Gold said on Wednesday that it will retrench 1, 110 mine workers by the end of the week.

The company said the downsizing is an effect of the fire caused at its Beatrix West shaft. In an emailed statement, the company also added that it will keep parts of the shaft open for as long as they remain profitable.

Producers in South Africa are struggling with higher costs as strikes led to above-inflation wage gains, while demand wanes.

Government will initiate a specific programme of action to deal with the “crisis perception” in the mining industry, Mineral Resources Minister Susan Shabangu said on Tuesday in an interview with the pubic broadcaster, SABC.

Shabangu said government met with bosses of mining houses on Friday to discuss the problems facing the industry.

On May 27th, Anglo American Platinum, the world’s biggest producer of platinum, announced it may reduce South African job cuts in its restructuring proposal to less than 6,000 and as few as 1,100, labour union United Association Of South Africa said.

The ruling party Africa National Congress (ANC) is concerned with the turns and twists at the mines. The tumultuous developments at the mines are the least things the party would want considering the election next year.

Scores of mineworkers, security guards and police officers were killed during violent wildcat strikes which have hit several mines, most notably the Lonmin platinum mine in Rustenburg.

Shabangu’s announcement follows a statement last week by both President Jacob Zuma and Finance Minister Pravin Gordhan, who both expressed concern about labour tensions and the adverse effect it has on the economy and job creation.

Sibanye’s shares were up 1.61 percent at R7.57 in the early morning of Wednesday.