Amplats may lay off 3,700 workers as metals prices plunge

Anglo American Platinum is likely to retrench 3,700 employees across its platinum metals mining business.

The group reported that profit decreased by 71% for the year, due largely to a 35% decrease in the platinum group metals (PGMS) dollar basket price during the 2023 financial year.

Amplats CEO Craig Miller said on Monday that low prices, the drop in profit and “ongoing macroeconomic pressures” have compelled the company to take active steps to secure its long-term sustainability.

As a last resort, it commenced this week with a restructuring process in terms of Section 189A of the Labour Relations Act.

The process will involve a period of consultation with stakeholders, including trade unions and other affected nonunionised employees.

Only once this has concluded will the final number of affected jobs be known.

However, Amplats said, the restructuring was expected to affect 3,700 employees (about 17% of its staff) and the company would also review contracts with 620 service providers.

“We have worked hard to address aspects in our business that are impacted by both the global and local challenges currently facing the PGM industry and have already implemented several key cost-saving initiatives.

“However, given the market outlook and protracted lowprice environment due to structural changes in our markets, further measures are required to build the resilience that will sustain this business,” Miller said.

In its 2023 financial results released on Monday, the group reported a 67% drop in earnings before interest, taxes, depreciation, and amortisation.

Its headline earnings of R14bn were 71% lower than 2022.

The Minerals Council SA noted in its Facts and Figures report for 2023, published earlier in February, that the drop in PGM prices, coupled with high labour and electricity prices, could potentially affect between 4,000 and 7,000 mining jobs in 2024.

The report showed that the value of total sales of PGMS for 2023 was likely declined by about 33%, led by palladium and rhodium, which dropped by 36% and 56.5% from 2022 prices.

These two metals accounted for 60% of the PGM basket income split in 2023.

The group’s headline earnings were 71% lower than 2022