Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Anglo American Platinum (Amplats), the world’s main producer of the precious metal, has extended for 30 days its talks with the South African government about restructuring plans that could see it cut as many as 14,000 jobs and mothball two mines.
In a press release, the company said Thursday the country’s Department of Minerals Resources has agreed to extend the bilateral consultation process for another month “to allow sufficient time for the conclusion of the process.”
In January Amplats announced its intentions to close and sell off several of its mines in South Africa, as part of a long-awaited review of operations. The government criticized its handling of the matter and threatened to revoke some mining licenses, which prompted the platinum miner to put its plans on hold for 60 days to allow negotiations with unions and authorities.
Amplats’ controversial plans have caused tensions with controlling Anglo American (LON:AAL) on the one hand and with the Mineral Resources Minister, Susan Shabangu, and African National Congress (ANC) secretary, Gwede Mantashe, on the other.
The company currently supplies 40% of the world’s platinum demand. The proposed closures would remove 400,000 ounces of its annual production, or a bit under 20% of its annual baseline production target, as well as a 7% from its overall global production.
“We have made progress and have had constructive discussions with our stakeholders,” Chief Executive Officer Chris Griffith said in the statement. “However, the volume of information and data has necessitated the proposed extension.”
Image of Amplats CEO, Chris Griffiths, being interviewed after the January announcement, via YouTube
