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Anglo American Platinum (Amplats) plans to cut thousands of jobs at its mines in South Africa, it said on Monday, after profit plunged by 71% last year.
The company said it was embarking on a restructuring that could affect about 3,700 jobs at its South African operations, or 17% of the Anglo American unit’s workforce, as it battles to keep a lid on costs after a slump in the price of platinum group metals (PGMs).
The miner is also reviewing agreements with 620 contractors or service providers to help save costs, it said.
South Africa’s PGM miners are resorting to cutting jobs and postponing planned investments as they battle to preserve margins after a sudden change in outlook following a rapid plunge in metal prices. Palladium declined by 37% last year after surging to more than $3,400 an ounce after Russia’s invasion of Ukraine. Rhodium, which soared to almost $30,000 an ounce in 2021, was trading at $4,365 an ounce on Monday.
The job losses come as platinum output has been gradually declining over the past decades with investors hesitating to invest in new mines as a growing battery electric vehicle sector clouds platinum metals’ demand prospects.
The restructuring decision “has not been taken lightly”, Amplats CEO Craig Miller said.
“It’s very much a last resort, not least as we recognise the unemployment challenges in South Africa and the socio-economic impact that the proposed restructuring may have on our people and the communities we are part of,” he said.
The Johannesburg-based producer’s profit slumped to 14 billion rand ($742 million) in the year ended Dec. 31 from 48.8 billion rand the previous year. Amplats slashed its dividend by 81% to 21.30 rand per share.
Amplats’ South African peers Sibanye Stillwater and Impala Platinum are also planning to cut staff.
The job losses could be avoided if Amplats sells its loss-making shafts, Livhuwani Mammburu, spokesperson for National Union of Mineworkers said.
“We are going to engage Amplats and see if this can be avoided as we can’t allow such a huge number of workers to be retrenched,” Mammburu told Reuters. “We have always told Amplats to sell its loss-making mines to interested investors to avoid job losses.”
Anglo American CEO Duncan Wanblad told Reuters earlier this month that the group was considering deeper cost-cutting measures if market conditions did not improve, after announcing in December sweeping cuts to save about $1.8 billion by 2026.
Amplats is postponing planned projects at its Amandelbult complex, where most of the affected jobs are, Miller said. He declined to say whether Amplats would consider selling Amandelbult.
The platinum miner is targeting a combined 10 billion rand in savings this year by reducing costs and postponing planned expansion projects.
Amplats would continue to focus on driving efficiencies and could consider additional “appropriate responses” if metals prices weaken further, it said.
It will also place its Mortimer smelter on care and maintenance from the middle of this year, saving about 3.5 billion rand over the next three years, Miller said.
($1 = 18.8727 rand)
(By Prerna Bedi, Nelson Banya and Felix Njini; Editing by Kirsten Donovan and Mark Potter)
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