Anglo American subsidiaries Amplats and De Beers are consulting with employees over job cuts that could affect hundreds of staff at the Amplats corporate office and at De Beers’ Venetia mine in Limpopo.
Anglo American has sold several noncore assets as the London-listed diversified miner focuses on copper, premium iron ore and crop nutrients in the wake of a failed $49bn (R885bn) takeover bid from Australian giant BHP.
In September Anglo American sold 13.9-million shares of Amplats representing about 5.3% of its total issued ordinary shares, at R515 a share for R7.2bn.
“The placing is intended to broaden the free float of Anglo American Platinum, reduce the number of shares distributed to Anglo American shareholders upon demerger and thereby reduce flowback following the demerger,” Anglo American said then.
Two weeks ago it sold another 6% of the business for $535m (R9.6bn). It has also made public its intentions to sell its 85% stake in De Beers and exit the diamond business.
Amplats and De Beers have now informed employees at head office and the Venetia mine respectively of consultations that began on November 20.
Amplats said the restructuring could affect 200 roles, while De Beers said it would not disclose how many employees could be affected, saying consultations were still under way.
Amplats blamed persistently low prices for platinum group metals (PGMs), market volatility and the demerger from Anglo as having created the need for it to “define a new, competitive, sustainable, independent standalone company”.
“This requires an organisational redesign at the corporate centre, taking into consideration the requirements to be a successful independent company. However, with the requirement to set Amplats as an independent company and other mitigation measures under consultation by the consulting parties, it is envisaged that the impact could be reduced.”
It said the decision to commence consultations under section 189A of the Labour Relations Act was “not taken lightly”.
Luphert Chilwane, spokesperson for the National Union of Mineworkers, said the union was aggrieved and was awaiting the opportunity to make representations on the proposed restructuring.
“We do not see any reason why the company is opting for section 189 [when it] retrenched workers a few months ago.”
Gideon du Plessis, the secretary-general of trade union Solidarity, said its members had been affected by the restructuring as well. He also expressed frustration that the mining company was seeking to let go of workers close to Christmas.
It is sad that the Christmas present the employees received from the company is a section 189 letter and uncertainty that goes with it
— Gideon du Plessis, secretary-general of Solidarity
“Our members have received a notification regarding the consultation process, but we will approach Anglo to express our dissatisfaction that they did not formally notify Solidarity. It is sad that the Christmas present the employees received from the company is a section 189 letter and uncertainty that goes with it,” said Du Plessis.
De Beers, the world’s biggest diamond producer by volume, said “prevailing industry conditions” were being taken into account during the process of “aligning” the Venetia workforce with the transition from open pit to underground mining.
“This review is integral to Venetia’s long-term success as it progresses from the construction phase to the operational phase of the underground mine, reflecting a recalibration of operational needs as the project advances,” said De Beers.
The World Platinum Investment Council said in a quarterly report published last month that while restructuring of platinum operations is for the time being expected to be completed by the end of 2024, the fundamental reason for restructuring has not changed.
“Although the rand-denominated PGM basket price has been stable for around a year, prices remain too low to incentivise new investment. With mining inflation expected to drive production costs higher, there remains a scenario where further measures may be required to help support the industry’s financial sustainability.
“Accordingly, platinum supply risks remain elevated in our view,” it said. The World Platinum Investment Council said in a quarterly report published last month that while restructuring of platinum operations is for the time being expected to be completed by the end of 2024, the fundamental reason for restructuring has not changed.
The council said total platinum supply increased 5% year-on-year in the third quarter of 2024 with mine supply increasing 7% year-on-year, largely driven by production from South Africa.
“The country benefited from improved smelter availability supported by reduced electricity shortages during the quarter which together allowed for a release of work-in-progress inventory and more than offset some processing constraints in Zimbabwe,” said the council.
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