2 651 jobs set to go at Bokoni

On care and main­te­nance

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

BOKONI Plat­inum, the joint ven­ture be­tween An­glo Amer­i­can Plat­inum (Am­plats), and At­latsa Re­sources, has given no­tice of its in­ten­tion to re­trench 2 651 work­ers, sig­nalling the lat­est blow to jobs in the min­ing in­dus­try, the Na­tional Union of Minework­ers (NUM) an­nounced yes­ter­day.

This as Am­plats recorded R2.2 bil­lion of as­set write­downs in the first half, lead­ing to a 55 per­cent drop in head­line earn­ings to about R750 mil­lion.

The NUM said it feared that fig­ure for the no­tice to re­trench was much higher as the 2 651 fig­ure ex­cluded con­trac­tors, adding that it had been served with a Sec­tion 189 no­tice of the Labour Re­la­tions Act with the in­ten­tion of plac­ing the com­pany un­der care and main­te­nance – a move which it planned to op­pose.

“The de­ci­sion by Bokoni Plat­inum will lead to a high rate of un­em­ploy­ment in sur­round­ing com­mu­ni­ties and dozens of fam­i­lies would be plunged into poverty. We call on Bokoni Plat­inum to re­turn the min­ing li­cence to the Depart­ment of Min­eral Re­sources so that in­ter­ested com­pa­nies must take over. This com­pany does not have the in­ter­est of the work­ers and the sur­round­ing com­mu­ni­ties at heart. They only care about profit,” said Phillip Mankge, NUM North East re­gional sec­re­tary.

Mankge also said that the mine had cited fi­nan­cial prob­lems for plac­ing the op­er­a­tion on care and main­te­nance.

“How­ever, the com­pany did not en­gage with the union on the process to em­bark on a cost sav­ing mech­a­nism, so, there­fore, we are not con­vinced why would the mine want to take this harsh de­ci­sion to close the mine,” he added.

Am­plats, the world’s big­gest plat­inum pro­ducer has a 49 per­cent stake in Bokoni, which has been bleed­ing cash for years, while Toronto and JSE-listed At­latsa owned 51 per­cent in the mine.

At­latsa told the mar­ket on Fri­day of the de­ci­sion to put the mine on care and main­te­nance, say­ing that the joint ven­ture part­ners had pulled the plug on fund­ing the mine as part of a deal that will see the write-off of R4.2bn in debt.

At­latsa shares were also sus­pended on the JSE on Fri­day.

Ear­lier yes­ter­day, Am­plats chief ex­ec­u­tive, Chris Grif­fith, said Am­plats had agreed to fund, through a loan ac­count to Bokoni, all once-off costs as­so­ci­ated with plac­ing the mine on care and main­te­nance, as well as on­go­ing care and main­te­nance costs up un­til De­cem­ber 31, 2019.

Grif­fith also painted a bleak pic­ture of the neg­a­tive im­pact of Bokoni on the group, say­ing its eq­uity in­ter­est was fully im­paired at De­cem­ber 31, 2016, amid the dif­fi­cult en­vi­ron­ment for plat­inum.

Dur­ing the first half of 2017, af­ter cap­i­tal­is­ing 49 per­cent of fund­ing pro­vided to the mine, Am­plats eq­uity ac­counted losses of R161m and im­paired the re­main­ing bal­ance of R45m.

“At­latsa’s abil­ity to ser­vice its debt obli­ga­tions in the con­text of the cur­rent mar­ket con­di­tions, where Bokoni Plat­inum Mine is its main source of fund­ing, is doubt­ful. Am­plats has im­paired all but R201m in fund­ing pro­vided to At­latsa. This re­sulted in an im­pair­ment loss for the pe­riod of R214m, which is in­cluded in head­line earn­ings,” he said.

Rene Hochre­iter, a min­ing an­a­lyst at Noah Cap­i­tal Mar­kets, said it was over for Bokoni.

“Things have not been work­ing at Bokoni. It is go­ing to get moth­balled af­ter ap­proval from the Depart­ment of Min­eral Re­sources. At this stage Bokoni is a waste of money,” he said. Go to page 17 for Am­plats re­sults.

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