South32’s Hotazel Manganese Mines (HMM) are located in the manganese rich Kalahari Basin in the Northern Cape South Africa. The region is home to 80% of the world’s manganese ore body. (Image courtesy of South32)
Shares in BHP Billiton spin-off South32 (ASX:S32) (JSE:S32) dropped Monday after South Africa’s National Union of Mineworkers (NUM) said the company was planning to lay off more than 400 workers at its manganese operations.
The union, South Africa’s largest mining labour group, said it had already received notice from South32 about the planned cuts, and asked the government to intervene, Reuters reports.
Prices for manganese, used to improve the strength of steel, have slumped by more than 30% since BHP announced it would conduct a demerger in August 2014.
South32, which takes its name from the latitude linking its main operations in Australia and South Africa, warned in August it was planning to slash costs and capital expenditure, as it was expecting “tougher times” ahead.
Reporting its first financial results since becoming a stand-alone company, South32 also revealed at the time that it was reviewing its 60% stake in the Samancor manganese joint venture, which co-owns with Anglo American. Production was suspended following a fatality at one of the mines in early November. The company decided later to keep the mines closed until the ongoing strategic review is completed.
The Perth-based company closed Monday in Sydney more than 3% down at A$1.12 per share. Since first trading on the ASX in May this year, South32 has lost more than 45% of its value, as the company focuses on manganese, silver, nickel and coking coal, some of the commodities that have been hardest hit globally in the wake of China’s economic slowdown.
Source: Google Finance.
