By Ed Stoddard and Clara Ferreira-Marques
CAPE TOWN Feb 7 Threats by South African
politicians to review mining licences are "out of order", the
incoming head of mining group Anglo American said on
Thursday, after its plans to cut jobs triggered a fierce
response from the government.
Anglo's struggling platinum business wants to cut 14,000 job
cuts as it mothballs two mines and sells another, part of a plan
it hopes will restore it to profit amid rising costs, weak
demand and workforce unrest.
The planned lay-offs at Anglo American Platinum
come as South Africa's government struggles with a jobless rate
that official figures put near 25 percent, but which many
believe to be higher.
The ruling African National Congress said the overhaul
justified a review of mining licences and President Jacob Zuma
said this week that threatening mine closures was almost
Mark Cutifani, who is due to move to Anglo American in April
from his current role as Chief Executive of AngloGold Ashanti
, said industry and government should be careful of the
words they use as people can interpret them the wrong way.
"Threats to licences are out of order," Cutifani told a
mining conference in Cape Town. "I hope after the hue and cry
from investors all around the world ... we've all learned the
lesson that we shouldn't be threatening licences when a company
is looking at preserving its life."
"At the moment the industry and the government is shouting
at each other from our respective corners," he said.
The ANC wants to avoid job losses ahead of a general
election next year, but thousands of miners could be laid off as
their employers grapple with soaring costs and poor
Amplats, as Anglo's platinum arm is commonly known, swung to
its first annual loss in 2012 and the parent company has said
both the industry and its own unit - the world's top producer of
the white metal - are in an unsustainable position.
Anglo's outgoing CEO Cynthia Carroll said this week the
company would press ahead with the restructuring despite the
objections from the ruling party, government and unions.
Cutifani, an Australian, was appointed to the top job at
Anglo in large part because of his good relations with
government. He is head of South Africa's chamber of mines, a
position he will retain in his new role.
He played up the growth potential of South Africa's mining
sector, but said it had underperformed the Johannesburg stock
exchange by 60 percent over the last six years.
Increased political and social risks had been a significant
factor, including violent labour strikes last year.
"In South Africa, we don't talk about productivity,"
Cutifani said. "It may not be the most important issue today,
but in 10 or 15 years it is the most important. It is the only
thing that will lift South Africa out of poverty."