Amplats could cut 4 000 jobs in SA, Zim operations as lower prices prompt profit crash

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  • Anglo American Platinum (Amplats) has initiated a retrenchment consulting process that may result in more than 4 000 jobs being lost.
  • The miner, along with its counterparts, are currently battling a downturn in metal prices as well as SA constraints, including ports and electricity.
  • Amplats also reported on Monday that its profits fell more than 70% in its year to end-December, while its cash pile almost halved.

Anglo American Platinum (Amplats) has initiated a process that could result in more than 4 000 job losses across its operations as it is firmly in the grip of biting platinum group metals prices.

On Monday, Amplats said the Section 189 process will run over the next few months before it could be sure of the exact number. This is in addition jobs already lost at its head office late last year, which reduced head office roles by 30%.

About 3 700 direct Amplats employees are likely to be affected, with another 600 people employed by contractors whose supply agreements will be reviewed.

“This review may result in the renegotiation of certain contract terms and scope, not renewing contracts when they expire and terminating other contracts within the contractual provisions,” said Amplats CEO Craig Miller.

Amplats has about 20 000 employees, including contractors, in its SA and Zimbabwe operations, which are also affected by the possible job losses.

Major South African miners last year initiated restructuring exercises with concerns that thousands of jobs will be lost as miners attempt to respond to depressed commodity prices and A deteriorating domestic business environment. Along with the tough economy, many are grappling with rising electricity costs, unreliable supply and poor railway operations. 

Amplats also announced on Monday that headline earnings slumped 71% to R14 billion in its year to end-December, while its net cash pile fell 45% to R15.4 billion. Along with a 35% fall in the price of its basket of metals in dollar terms, it also reported a 1% fall in refined production to about 3.8 million ounces.

The Conciliation, Mediation and Arbitration (CCMA) will facilitate the Section 189A process between the company and the trade unions. “Only when the consultation process is concluded will the final number of impacted jobs be known,” said Miller.

The imminent job losses come despite the company responding “rapidly throughout 2023” to reposition it to cope with the lower platinum group metals prices that declined by between 14% and 60% last year.

“It is clear to us, however, that the extensive range of actions we have already taken do not go far enough,” said Miller. The group said after working through all the options, “it is apparent that further measures to create critical resilience and greater competitiveness are needed to sustain the business.”

Amplats acknowledged the process would negatively affect employees and “understand the socio-economic impact this will have on our employees, their families and communities.”

The company said this action is necessary “to enable the continued employment of thousands of workers and contractors… As we progress the implementation of the Section 189A process, we will put in place the appropriate well-being support program to help our people through this difficult process as well as initiate comprehensive social impact mitigation measures,” said the company.