Implats says 2 500 jobs at risk, potentially more

Due to severe financial pressures at Impala Rustenburg.

Impala Platinum becomes the next major South African miner to indicate it might be contracting the size of its workforce following its announcement on Monday that up to 2 500 jobs may be at risk at its Impala Rustenburg operations.

“The company is currently experiencing severe financial pressures at Impala, largely as a result of persistently low metal (rand) prices and continued production cost increases,” the company said in a statement. “Labour productivity rates have also declined over the last few years and production levels at Impala Rustenburg have reduced from a historical base of some 1 000 000 platinum ounces per annum, to the 680 000 to 720 000 ounces forecast for the 2018 financial year.”

The announcement follows hot on the heels of the company reporting annual financial results for the year ending June last week which saw it announcing a R10.2 billion impairment relating to a prepayment made to the Royal Bafokeng. But the results also revealed how badly the Impala operations were bleeding – they recorded a headline loss after tax of some R2.68 billion.

Nico Muller, Implats’ incoming chief executive officer, did not rule out more cuts. “The financial sustainability of Impala has deteriorated significantly over recent years. We have implemented ongoing cost saving and optimisation initiatives in an attempt to restore profitability and secure continued employment as far as possible. Unfortunately, we are now left with no further option in the prevailing operating environment, but to consider further restructuring processes that may lead to a reduction in the number of employees.”

The decision to restructure comes at a time when the country’s mining industry is shedding jobs. In recent months, Sibanye (7 500), AngloGold (8 500) and Atlatsa (2 600) have all indicated jobs may be lost due to restructuring and closures. With Impala Platinum this now brings the total to 21 000 potential job losses in the space of a few months, although there is hope that some of the jobs at AngloGold might be saved with the announcement last Friday that they may have found a buyer for the Kopanang Mine.

The Impala Platinum share price has been in free fall since the announcement of the results, down 15.7% to R33.04 per share at the time of writing.