Amplats to Idle Shafts, May Cut 24% of Workers After Review
Anglo American Platinum Ltd. (AMS), the biggest producer of the metal, will idle four shafts in South Africa in a move that may affect 14,000 jobs, about 24 percent of the company’s employees, after a review of its operations.
The closures by Amplats, as the Anglo American Plc (AAL) unit is known, will cut output by 400,000 ounces a year, it said in a statement today, as much as 19 percent of production.
The shutdowns may affect 13,000 jobs in Rustenburg, a region where at least 46 people were killed in mine-related violence last year. Amplats said it intends to create as many jobs as it cuts and starts 60 days of talks with labor unions today. Platinum erased an earlier decline as Amplats announced the shaft closures, with futures for April delivery climbing 1.4 percent to $1,680.50 an ounce, the highest since Oct. 9, by 8:57 a.m. in Johannesburg.
“The company has to take drastic and significant actions to save the company,” Chief Executive Officer Chris Griffith said on a conference call.
The stock rose as much as 1 percent to 496 rand in Johannesburg trading, after earlier dropping 0.6 percent.
Amplats said yesterday it would post a loss for 2012 because of walkouts by mineworkers that cut output by 306,000 ounces. A wave of strikes over pay that started at South African platinum mines and spread to gold, iron-ore, diamond and coal producers cut mining output by 10.1 billion rand ($1.2 billion), costing tax revenue, exports and jobs, according to the National Treasury.
The company plans to create 14,000 jobs focused on housing and small business development in areas including Rustenburg, “an equivalent number of jobs to those that may be affected by the restructuring,” Amplats said. The producer had 58,541 employees, according to the company’s annual report.
“Anglo American recognises the potential impact of these proposals on our people and their communities,” Cynthia Carroll, the departing Anglo chief executive officer, said in the statement. She ordered the review in February. Amplats has “identified the optimal mining configuration” to improve profitability and performance, Carroll said.
The reorganization will cost an estimated 3.2 billion rand, with retrenchments accounting for 1.2 billion rand of that, Finance Director Bongani Nqwababa said on the conference call.
The platinum producer trimmed its annual output target to 2.1 million to 2.3 million ounces. The company plans to cut capital expenditure by 25 percent in the next decade to 100 billion rand, it said.
The company plans to reconfigure its Rustenburg operations by shutting the Khuseleka 1 and 2 and Khomani 1 and 2 shafts, cutting output by 320,000 to 350,000 ounces a year across three operating mines in the area, it said. Amplats said it will divest its Union mines “at the right time.”
Anglo American this month appointed Mark Cutifani as CEO after losing $14 billion of market value under Carroll. Anglo owns 79.8 percent of Amplats, it said in a statement today.
South African mines shut nine platinum shafts and dismissed 3,332 workers in the six months ended December, the Minister of Mineral Resources Susan Shabangu said in a written reply to questions in parliament Dec. 2.
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