Amplats to slash 1,400 jobs, warns fresh strike could lead to more

Anglo American Platinum (LON:AAL), the world’s largest platinum producer, warned Monday the current strike at its South African operations could force the company to cut 1,200 to 1,400 jobs this year.

The miner said the planned layoffs would follow last year’s lost of 7,438 jobs, when merged five mines at its Rustenburg complex into three.

Despite Amplats returned to profitability last year, the company is now facing fresh challenges. Members of the National Union of Metalworkers of South Africa (Numsa), which represents about 10% of the company’s 4,500 staff at its processing plants, downed tools on Monday.

Reporting a net reported a loss of 568 million rand (US$51.2 million) for 2013, from a loss of 6.4 billion rand in 2012, CEO Chris Griffith warned a protracted strike would impact its recently achieved profitability, forcing Amplats to reconsider some of its more marginal operations.

“We have just gone through this very difficult 2012/2013, returned the company to profitability,” he said. “But if this strike continues at Rustenburg and some of those other operations, then clearly we are going to have to relook at what this means for the profitably of those mines.”

Mining accounts for 6% of South Africa’s gross domestic product and mineral exports make up 60% of export revenue. Companies have already cut several thousand jobs because of costly strikes and a weakening demand environment in the past two years, a blow to the country’s high unemployment rate of roughly 24%.

The workers on strike now are demanding that their employers raise entry-level salaries to ZAR12,500 rand ($1,150) a month from around ZAR5,000. Companies have offered an up to 9% increase.