Amplats holds off plan to axe 14?000 workers

2013-01-27 10:01

Announcement likely to be made tomorrow following meeting with labour union and government

Anglo American Platinum (Amplats) could make an announcement as early as tomorrow that it is willing to compromise on plans to retrench up to 14?000 workers, following a crisis meeting this week between the company, labour unions and the department of mineral resources (DMR).

The three stakeholder groups met on Thursday to seek a resolution to the furore caused by Amplats’ announcement last week of its intention to close four

loss-making shafts in Rustenburg and sell another in Limpopo.

A spokesperson for the department, Zingaphi Jakuja, said the various parties discussed a number of proposals on how the effects of the intended restructuring could be mitigated.

“Amplats has been allowed space to consult internally on these and a formal pronouncement will be made on Monday by the stakeholders,” she told City Press.

The meeting was attended not only by the company’s recognised unions, the National Union of Mineworkers and Uasa, but also other unions whose members count among Amplats’ employees, including the Association of Mineworkers and Construction Union (Amcu) and the National Union of Metalworkers of South Africa (Numsa).

Delegates attending the meeting were quiet about the proposals that were put to Amplats, but said they were confident a compromise could be reached.

“There definitely was a willingness from all the parties to find a solution that would benefit all,” said Alwyn van Heerden, Uasa’s sector manager for platinum.

The union’s Franz Stehring earlier told City Press it would oppose the restructuring because it believed Amplats didn’t follow the processes described in the Labour Relations Act.

Amcu’s national treasurer, Jimmy Gama, said the union had noticed “a change of attitude” in Amplats at the meeting.

The union last week claimed to represent just over 50% of the company’s 50?000-odd employees, a claim that continues to be the subject of a verification process.

“The spirit of the meeting was good,” said Gama. “It is difficult to say whether we’ll see a breakthrough – Amplats first have to consult internally – but all the parties will attempt to come up with solutions.”

NUM said this week’s meeting was an opportunity for Amplats to discuss the extent of its operational obstacles with unions.

“The company had to give us a brief of what was happening because we are all stakeholders,” said NUM spokesperson Lesiba Seshoka.

“We need to be realistic. We know the market (for platinum) is not doing very well, but we need to consult our members and ask them what we can do to help (the company remain profitable).”

A positive end-result to the engagement process between the parties could go a long way to stem the fallout from Amplats’ first announcement on the restructuring process last week.

Mining Minister Susan Shabangu called the company and its chief executive, Chris Griffith, “arrogant” for failing to consult with the regulator over the process, while ANC secretary-general Gwede Mantashe called for the company to surrender its mining rights over the shafts.

“From where I am sitting, the Amplats case is just testing the waters,” Mantashe said. “If nothing happens you’ll see a flood of these companies (doing the same).”

The extent of Amplats’ operational problems, however, became clearer on Friday when the company said it had lost 306?000 ounces of production during 2012 as a consequence of the sector-wide strikes at the time.

The lost production represents a loss of income to the tune of R4.6?billion at current prices.

The company is expected to report significant losses when it releases its full-year financial results for 2012 next month.

SOME FIRMS IGNORE MINING SECTOR GLOOM

The widespread gloom over the prospects of South Africa’s mining industry has not stopped some fortune seekers from pursuing new developments, as fresh deals and expansions continue to abound across a range of sectors.

In the latest example of a company pushing on with potentially lucrative plans, DiamondCorp, a junior mining group listed on both the London and Johannesburg stock exchanges, on Thursday said it had started the £27?million (R384?million) development of its Lace project, a proposed underground diamond mine near Kroonstad. It is envisaged the mine will deliver up to 500?000 carats of diamonds per year for 25 years.

The major funders of the development are the world-famous US-based jeweller Tiffany & Co, as well as South Africa’s Industrial Development Corporation.

DiamondCorp shareholders, which include ANC Deputy President Cyril Ramaphosa’s Shanduka Resources, have previously bankrolled mining fleet equipment, a processing plant as well as limited development activities to the tune of £18?million.

DiamondCorp chief executive Paul Loudon said diamonds remained a scarce commodity, which were mostly found in riskier territories.

“Diamonds are one of those commodities you don’t find everywhere,” Loudon said. “If you’re not operating in South Africa you could be mining in the DRC (Democratic Republic of the Congo). We’ve been here a long time and we’ve seen the country moving forward.”

Analysts said that despite concerns over the risks, the Lace mine should eventually prove to be a canny investment.

“We continue to find value in this company and, at the current share price, it remains a strong buying opportunity,” said Carole Ferguson, a research analyst at UK-based SP Angel Corp.

The announcement by DiamondCorp was one of several made this month by international investors who said they remained keen to carry on with their plans.

Ferrox Holdings, a Toronto-based company, said it was about to start a final feasibility study for its Tivani iron ore project in Limpopo.

The group has already appointed global financial services firm HSBC to act as an advisor as it pursues raising $1.7?billion (R15.2 billion) to build the mine and related infrastructure.

Asked whether Ferrox wasn’t put off by some of the factors which have made other foreign investors in South Africa run for shelter in recent months – including labour unrest, rocketing input costs as well as regulatory uncertainty – the group’s chairman, Jeff Ahbe, said the company was taking a long-term view on its investment.

“We’ve been in South Africa for a long time and have seen the political winds blow in many directions,” Ahbe said. “The ANC’s decision to dismiss nationalisation was a big positive for us and gave us a great degree of assurance.”

Even the beleaguered platinum sector has succeeded in attracting some new investments, with local firm Sable Platinum having staged a successful listing on the JSE in November.

Similarly, Canadian firm Ivanplats raised $307 million on the Toronto Stock Exchange in October, in the midst of the sector-wide mining strikes, for the development of its local Platreef platinum project, and for copper deposits in the DRC.

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