Anglo platinum arm sheds 14,000 jobs, risking unrest

Tue Jan 15, 2013 2:07pm EST
 

By Ed Stoddard

JOHANNESBURG (Reuters) - Anglo American Platinum plans to mothball two South African mines, sell another and cut 14,000 jobs, risking a repeat of last year's violent strikes as the world's largest producer of the precious metal struggles to stem losses.

Reaction to the long-awaited plan from Amplats on Tuesday was swift, with the government accusing the company of betraying its trust and a labour leader threatening strikes across its South African operations if the closures go ahead.

Improvements at Amplats, 80 percent owned by mining group Anglo American, are critical to the fortunes of its underperforming parent. In 2006, Amplats made up a quarter of Anglo's operating profit, but that has dwindled as the platinum firm struggles with rising costs and weak prices.

Investors welcomed the plan to cut output by almost a fifth - or 400,000 ounces a year - and begin a shift to profitable production as the first step in Anglo's own recovery.

But a labour leader promised to fight any attempt to put mines under "care and maintenance", when output is halted but they are maintained enough to be reopened in future.

"If they put any shaft on care and maintenance, all of the operations will go on strike. Nothing like this will be allowed," said Evans Ramogka, labour leader in Rustenburg.

Most of the cuts will fall in Rustenburg, in South Africa's platinum belt about 120 km (70 miles) northwest of Johannesburg. Rustenburg was the centre of last year's strikes when about 50 people died, including 34 shot dead by police at rival platinum producer Lonmin's Marikana mine in August.

Analysts cautioned that the size of the headline reduction could be overstated, as it was from planned production - a level Amplats has not reached for several years. Against market forecasts of output, it may be closer to 300,000 ounces, only a little above most analysts' expectations.   Continued...

 
A man walks past a train carrying goods, at Anglo Platinum's Khomanani shaft 1 mine in Rustenburg, northwest of Johannesburg January 15, 2013. REUTERS/Siphiwe Sibeko