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Union Ends Amplats South Africa Strike on Job-Cut Compromise

Anglo American Platinum workers strike outside the Khomanani Mine in Rustenburg, South Africa, on Jan 16, 2013. Photographer: Sibusiso Msibi/Sowetan/Gallo Images via Getty Images
Anglo American Platinum workers strike outside the Khomanani Mine in Rustenburg, South Africa, on Jan 16, 2013. Photographer: Sibusiso Msibi/Sowetan/Gallo Images via Getty Images

Oct. 10 (Bloomberg) -- A strike at Anglo American Platinum Ltd. ended after the world’s biggest producer of the metal and the largest union at its South African operations reached a compromise over plans to cut jobs.

The company known as Amplats will reopen applications for voluntary severance packages for seven days, AMCU President Joseph Mathunjwa told reporters today in Rustenburg, 130 kilometers (80 miles) northwest of Johannesburg. The AMCU estimates that the total number of job cuts will be brought down by 1,336 through reopening the process after previous applications weren’t granted, he said.

“The way we see it, there will be no forced retrenchments,” Mathunjwa said. “If we had gone to the Labour Court, we wouldn’t have achieved this.” Before speaking to reporters, he addressed about 5,000 striking miners concerning the agreement reached with the company at a sport stadium near Amplats’s operations.

The accord ends a strike that started on Sept. 27 and cost the company 44,000 ounces of platinum output, Amplats said today. The AMCU had challenged Amplats’ decision set out in August to consolidate five mines into three at its Rustenburg complex in a bid to boost profit. The operations are losing more than 1 billion rand ($100 million) every six months, Chief Executive Officer Chris Griffith said July 22.

Contract Positions

About 1,200 people who would have been dismissed and then hired as contractors to take care of the closed mines will be kept as full-time staff for at least six months, Mathunjwa said.

A further 328 positions that are now occupied by contracts will be reserved for permanent employees, Johannesburg-based Amplats said in an e-mailed statement.

The company first announced the restructuring plans in January, when it estimated it would cut as many as 14,000 jobs. The proposals were scaled back following pressure from unions and the government.

The National Union of Mineworkers, which was unseated by the AMCU as Amplats’s biggest recognized union in March, also sought to halt the reductions. The Labour Court in Johannesburg yesterday dismissed a case brought by the NUM to prevent the cuts, according to the judgment.

Amplats reported a loss excluding one-time items of 1.47 billion rand for 2012 and kept its dividend suspended. Anglo American Plc, which owns a 77 percent stake, will close or sell more of the platinum company’s mines if profit doesn’t improve next year, CEO Mark Cutifani said Aug. 29.

The plans will still enable Amplats to cut output capacity by about 350,000 ounces annually, it said.

Amplats shares rose 4 percent, the most since Sept. 19, to 416 rand by the close in Johannesburg, paring the decline this year to 6.8 percent. The spot price of platinum rose 1 percent to $1,395.24 an ounce by 5:50 p.m. in London.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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