Amplats to sell strike-hit South African mines
By Ed Stoddard and Zandi Shabalala
JOHANNESBURG (Reuters) - World number-one platinum producer Anglo American Platinum (AMSJ.J: Quote) is to sell a swathe of its most labor-intensive South African mines after a five-month strike shattered its hopes of ever making them profitable.
The mines account for over half of the company's workforce but only a quarter of production and their viability was dealt a blow when miners won pay increases of up to 20 percent. Amplats said it would now focus on its more mechanized mines.
For the miners who faced hardship in their campaign for better pay, a sale could increase the risk of future lay-offs.
The buyers are likely to be companies with a focus on deep-level, labor-intensive mines, which may have more appetite than Amplats for the challenge of making them commercially viable.
One of the biggest hurdles will be stiff opposition to any job cuts from unions and politicians. South Africa's National Union of Mineworkers (NUM) condemned the plan to sell the mines.
"Any sale is going to result in job losses and this is a punishment for poor workers," its general secretary, Frans Baleni, told Reuters on Monday.
Amplats said it was selling its Union mine, its operations at Rustenburg and South African joint venture Pandora, calling them "good long-life assets".
Ascribing a value to those assets in the shorter term appeared to present a challenge for analysts, faced with uncertainty over platinum prices and the risk that future attempts to cut costs at the mines will further inflame labor relations. Continued...