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Amplats scales back its job cuts plan

Friday, May 10, 2013 - 02:11

May 10 - Anglo American Platinum is to cut 6,000 mining jobs in South Africa, fewer than half the 14,000 originally planned, and slash platinum production by 10% this year, as it battles to return to profit. But as Joanna Partridge reports, Amplats has to tread a fine line in South Africa, to avoid a backlash from the government and restive trade unions.

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South African miners are no strangers to striking. And there may more protests on the way, as 6,000 jobs are to go at Anglo American Platinum, as it battles to return to profit. That's less than half the 14,000 jobs cuts initially proposed. But still little consolation for the President of the National Union of Mineworkers. SOUNDBITE: PRESIDENT OF (NUM) NATIONAL UNION OF MINEWORKERS, SENZENI ZOKWANA, SAYING (English): "As a union we won't take it light to the fact that people will lose their jobs, we know very well that the jobs that are done on the mine, there is no relationship with the broader economy. If the mine retrenches you it's very high that you won't find work for many years to come." As part of its restructuring plans, Amplats is slashing platinum production by 10% this year. The world's top platinum producer is trying to placate the South African government and fractious trade unions. A turf war between two powerful unions saw 50 people killed last year and led to illegal strikes. The unrest was a major reason why Amplats suffered its first loss in 2012. The reduction in job losses may soften the blow for the country's ruling ANC, which faces an election next year. But mining analyst Loane Sharp is concerned about government interference. SOUNDBITE: MINING ANALYST, LOANE SHARP, SAYING (English): "We're moving towards a situation where the state is more activist in a day to day affairs of mining companies, so it's very negative for companies. There will certainly be weakness in these companies' share prices, it might not be visible today but over the coming three to four years as commodity prices drop further as operating costs rise even higher and the temptation or the need to retrench workers intensifies, we're going to see companies unable to do so because of government decrees." Investors didn't respond well - and Amplats shares fell by over 4% at one point. The firm has to cut costs to return to profit - but operating in a country with 25% unemployment, it has to strike a difficult balance of carrying out its plans, without provoking a backlash from the unions.

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Amplats scales back its job cuts plan

Friday, May 10, 2013 - 02:11