Zimplats offers voluntary redundancy packages

Zimbabwe's largest producer of platinum group metals (PGMs), Zimplats, is facing financial pressure due to a significant decline in global platinum prices. In response, the company is offering voluntary redundancy packages to its employees in an effort to cut costs.

Platinum, a key component in catalytic converters used by automakers to reduce emissions, has seen a dramatic price drop since April 2023.

Trading at around US$1 316 at that time, the price had fallen to US$899.70 by around 3 pm (local time) yesterday.

Weaker economic growth in China is cited by producers as a major factor in the price decline.

Zimplats anticipates that weak platinum group metal prices will continue for the next 12 to 18 months. This extended period of low prices necessitates further cost-cutting measures for the company.

In a staff circular dated 18 March, chief executive officer Alex Mhembere announced the launch of “a voluntary retrenchment exercise for all employees wishing to be considered”. The programme aims to "mitigate the need for a compulsory retrenchment."

"While our cost containment and cash preservation programmes yield expected results, the company's situation remains difficult and therefore additional measures still need to be undertaken,” stated Mhembere.

The company’s latest financial results reflect the challenging market conditions.

Zimplats reported a post-tax loss of US$8.8 million, a stark contrast to the US$159.6 million profit recorded in the previous period.

This represents an unprecedented 105 percent decline in earnings, marking the first time in nearly a decade that Zimplats has suffered a loss.

Zimplats employees have until Friday to submit their applications for the voluntary redundancy programme, which offers a minimum of three months' pay as a severance package.

“We have been working with all teams across the board in implementing various cost containment and cash preservation programmes," said Mhembere.

“I am confident that as a team we will successfully navigate through the headwinds.”

Zimplats is not alone in facing these difficulties. A wave of retrenchments is sweeping across global PGM producers.

Impala Platinum, Zimplats’ parent company, has already implemented significant job cuts in neighbouring South Africa, which holds roughly 70 percent of the world’s platinum output.