Implats: 2,500 jobs at risk
Impala Platinum (Implats), the world’s second-largest miner of the metal, could lay off up to 2,500 of its 31,000-strong workforce at its Rustenburg mining operations to cope with low metal prices and declining production, CEO Nico Muller said on Monday.
The official engagement with labour started just days after Implats’s annual results in which Muller — during his first outing as the company’s CEO — outlined a strategy to return the company to profitability.
Anglo American Platinum began a major restructuring of its Rustenburg mines in 2013, shedding more than 7,000 jobs before selling them to Sibanye Stillwater, which is also talking of cutting production from unprofitable shafts, giving the newly acquired mines until the end of the year to perform.
Lonmin has cut 6,000 jobs and closed unprofitable mines because of high costs and persistent low platinum prices.
Investec said in a note on Monday that Implats “has very little choice but to walk the tough road that peers embarked on a bit earlier as the platinum group metal pricing environment is not showing any signs of significant improvement”.
Implats has informed unions, government authorities and other stakeholders at its Rustenburg mines, known as Impala, that it has started a section 189 process in terms of the Labour Relations Act to restructure
1-million ounces, the original output expected from the mature mines, but the company now forecasts they will produce between 680,000 and 720,000 ounces
those mines, warning that jobs could be lost.
“The financial sustainability of Impala has deteriorated significantly over recent years. We have implemented ongoing cost saving and optimisation initiatives in an attempt to restore profitability and secure continued employment as far as possible,” Muller said.
“Unfortunately, we are now left with no further option in the prevailing operating environment but to consider further restructuring processes that may lead to a reduction in the number of employees.”
Implats has grouped its Impala mines around Rustenburg into three groupings, with old mines, mature mines and
growth mines housing the group’s assets in the area.
The old mines have limited life left and are likely to be harvested, meaning very little capital will be invested in them and they will be mined as aggressively as possible to make money over the next two years before they close.
The mature mines are the engine room of Impala. Muller stressed these had to return to profitability with improvements in productivity.
There are three mines representing growth for Implats and these will come into steady state production over the next five years.
Output from all these mines was 1-million ounces, but this has steadily eroded and the company now forecasts they will produce between 680,000 and 720,000 ounces for the financial year to end-June 2018.
“It is expected that some 2,500 people could be affected near term, but this does not preclude further optimisation processes that may be required in future to ensure the continued sustainability of the operation,” Muller said.