* Operation staffed for higher output targets
* Implats has a 73 percent stake in operation
(Adds analysts, union comment, background)
By Ed Stoddard and Yumna Mohamed
JOHANNESBURG, May 27 Impala Platinum (IMPJ.J),
the world's second largest platinum producer, said on Friday it
aimed to cut staff at its Marula subsidiary in South Africa
because of a persistent failure to meet production targets.
It said in a statement job cuts would be needed since the
operation is staffed for higher production levels which will not
be met. It said it would not reach its target of 95,000 ounces
of refined platinum per year by 2013 but annual output would
remain at 70,000 ounces.
Its share price briefly pared gains on the news but then
bounced back. At 0840 GMT it was trading two percent higher at
186.85 rand compared to a 0.88 percent increase on the All-share
Implats said Marula "has continued to underperform against
the operational targets that management has set."
The company may face resistance from unions on the job cuts
front as labour relations in South Africa are strained and the
annual round of wage talks are kicking off.
"We will really not be welcoming any job cuts as a union
especially when the focus of the entire country is on job
creation," said National Union of Mineworkers (NUM) spokesman
But he said the union would wait for the start of the
consultation process which is required by law.
Impala has a 73 percent stake in Marula.
Analysts said such a move on jobs was needed if production
targets were not being met. "They are getting back to basics on
the mining side, re-positioning the mine for the future," said
David Davis, an analyst with Standard Bank Group Securities.
Abri du Plessis, chief investment officer Gryphon Asset
"It's important for mines to keep profitability. While it is
unfortunate when jobs have to be cut, you can't fault them for
making a prudent business decision. It is the right move."
Miners are keen to take advantage of high commodity prices
by boosting production but are equally keen on containing
spiralling costs in South Africa, which include rapidly rising
wages and power prices.
The NUM is demanding a 14 percent pay rise for its members
at Implats, far above inflation which was 4.2 percent in April
Last year, the union and Implats agreed on a 7.5-8 percent
rise in wages after talks which took weeks and only just managed
to avoid a strike.
The platinum price XPT= on Friday was trading about one
percent higher at $1,784 an ounce.
(Additional reporting by Olivia Kumwenda)