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‘Restructuring a last resort’, says Amplats as over 4 000 jobs in jeopardy
'Only once this has concluded will the final number of impacted jobs be known'.
Picture: iStock
More than 4 000 are on the line as Anglo American Platinum (Amplats) embarks on a retrenchment consulting process.
On Monday, Amplats announced that it had taken “active steps” and decided to initiate a Section 189A process.
‘Last resort’
The platinum producer said that the process was a “last resort” after the company’s profits fell by more than 70% in 2023.
This is largely due to the low platinum group metals (PGM) prices that declined last year as well as “ongoing macro-economic pressures”.
Amplats said the retrenchments, which could impact about 3 700 direct employees – about 17% of its workforce – and at least 620 contractors.
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“These actions are necessary to continue the employ of thousands of workers and contractors who will continue to add value for our stakeholders – through salaries, taxes and royalties, as well as procurement of goods and services from local suppliers.
“We will approach and implement the process in line with our values and cultural commitments through centring our people and the impact this will have on them,” Amplats CEO Craig Miller said in a statement.
The Conciliation, Mediation and Arbitration (CCMA) is expected to facilitate the Section 189A process between Amplats and the trade unions.
“Only once this has concluded will the final number of impacted jobs be known,” Miller continued.
‘Sustainable future’
According to Amplats, the restructuring process was also necessary to protect the company’s “competitive position and long-term sustainability”.
“We have worked hard to address aspects in our business that are impacted by both the global and local challenges currently facing the PGM industry and have already implemented several key cost-saving initiatives.
“However, given the market outlook and protracted low-price environment due to structural changes in our markets further measures are required to build the resilience that will sustain this business,” Miller explained.
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In the financial results for the year 2023, which were disclosed on Monday, Amplats disclosed a 67% decline in earnings before interest, taxes, depreciation, and amortisation.
The company revealed that headline earnings decreased by 71% to R14 billion compared to the previous year, 2022.
At the same time, sales went up by 2%, but this proved insufficient to offset the challenges posed by a 35% reduction in the PGM dollar basket price, particularly in palladium and rhodium.
“The lower prices also impacted the purchase of concentrate inventory measurement which resulted in a R10 billion increase in cost of sales compared to 2022.”
Minerals Council report
Earlier this month, the Minerals Council of South Africa published in its Facts and Figures report for 2023.
According to the report, Eskom and Transnet had a negative impact on the mining sales and output performance.
This, in turn, contributed to the steep falls PGM and coal prices.
The report further states the drop in PGM prices could potentially affect between 4 000 and 7 000 mining jobs in 2024.
However, the Minerals Council stated that the South African mining industry still made a “crucial contribution” to the country’s economy “despite the significant constraints caused by unprecedented electricity load curtailment, debilitating rail and port failures and pervasive criminal activities during the year”.
