Business
South Africa: Amplats to sell mines and layoff 14,000
Anglo American Platinum (Amplats), the world’s top platinum producer has revealed that it would cut 14,000 jobs in a broad restructuring of its strike-hit South African operations.
Additionally, Amplats said it planned to close four shafts and sell a mine considered unsustainable in South Africa.
“As a result of the proposed changes to the business, a total of up to 14,000 jobs may be affected,” the firm said in a statement. The vast majority of job cuts, 13,000 in all, would be lost around Rustenburg, a city 110 kilometres (70 miles) northwest of Johannesburg that was the crucible of labor unrest last August and September.
The labor unrest reduced Amplats platinum production by about 306,000 ounces.
In the end, the strikes may have merely been the last straw for Amplats, which like other operators in South Africa has struggled amid high extraction costs, a lack of modernization and steeper global competition.
Amplats said operations in South Africa have been unsustainable “for some time” because of high labor costs and low-quality ore.
“We are facing tough decisions to restore profitability to our operations,” said Amplats CEO Chris Griffith, while insisting that plans for restructuring pre-dated the strikes.
The restructuring would cost 3.2 billion rand (US$366 million) and result in a 400,000 ounce drop in platinum output, cutting total output by as much as a fifth.
A two-month consultation process with unions started on Tuesday, but initial reactions appear to offer little hope of a deal to save the jobs.
“We are really shocked,” said Lesiba Seshoka, spokesman for the main union, the National Union of Mineworkers (NUM). “It’s a disaster for the economy, it’s a disaster for all of us.
“We are appealing to all workers to come together in fighting these retrenchments and working together to safeguard existing jobs.”
Similar problems affect other mines
Harmony Gold announced earlier in January that it may shut a mine in Carletonville near Johannesburg, potentially affecting 6,000 staff.
World number four gold producer Gold Fields in December cut off a chunk of its South African business into a separate company that will shield its shares from future unrest.
Platinum miner Lonmin, closed one of its 11 shafts in Rustenburg in September, and plans to cut management-level specialist jobs.
Meanwhile official figures released Tuesday showed mining production fell by 4.5 percent year-on-year in November, with contraction especially in copper (52.7 percent) and gold (32.2 percent) output.
Amplats vowed to try to replace jobs with new posts in “housing, infrastructure and small business development” in the regions that habitually send laborers to the mines, notably the Eastern Cape province.
The world’s number one platinum producer warned Monday that its 2012 earnings would probably show a loss of 491 to 628 cents per share, down from a profit of 1,365 cents per share in 2011.
A reassessment of the value of its assets resulted in a write-down of 463 million rand (US$53 million), it said.
Copyright 2013 AFP