Mining in ‘severe’ financial distress: Amplats

2012-11-02 06:46

South Africa’s platinum industry is in “severe financial distress” and high wage settlements to get wildcat strikers back to work will lead to job cuts, Anglo Platinum has said.

The world’s top platinum producer said it was losing production averaging 3 694 ounces of platinum per day due to a strike at its South African operations now in its seventh week. To date 141 640 ounces of the precious metal production have been lost.

“This is completely the wrong time to be offering unsustainable wage increases that the moment people are back at work you just have to (lay off) a whole lot of people,” the firm’s chief executive Chris Griffith told Talk Radio 702 yesterday.

“There will be implications for jobs,” he said adding that Amplats could not “negotiate in a climate of anarchy”.

Amplats parent company Anglo American has already placed its four Rustenburg mines “under review” – management-speak for their possible closure.

Layoffs in the mining industry were a prime factor behind a rise in unemployment in the third quarter that left more than one in four of the labour force out of work.

Months of unrest in the mines have hit platinum and gold output, threatened growth and drawn criticism of President Jacob Zuma for his handling of the most damaging strikes since the end of apartheid in 1994.

But the number of strikes has dropped in the last two weeks amid management threats of mass dismissals and some payment sweeteners.

Amplats said last week it had reached a deal with several unions and would be offering incentives such as one-off hardship payments of R2 000 to end the strike that has crippled production.

But the workers turned down the offer saying Amplats should match a salary increase of up to 22% offered by rival Lonmin, after a violent wildcat walkout at its nearby Marikana platinum mine in August.

The Lonmin offer came after the police killing of 34 miners on August 16, the bloodiest security incident since apartheid.

Lonmin, the world’s third largest platinum producer, is scrambling to get back on its feet after the violent six-week strike that crippled production and led it to ask shareholders for $800m in a rights issue on Tuesday.

The company also gave unions notice of a restructuring, with proposed job losses in its 25 000-strong work force expected to be implemented in early 2013.

Striking workers at gold firms, including AngloGold Ashanti and Gold Fields, returned to work last week after threats of mass dismissals and an offer of a small pay increase.


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