PLANS by Anglo American Platinum to cut 14000 jobs came as a shock to the government, Mineral Resources Minister Susan Shabangu said yesterday.
"It is regrettable that the company consulted with [my] department less than seven days ago despite the major socio-economic ramifications of its decision," she said in Pretoria.
"We are surprised and shocked today [yesterday]."
The mining giant announced the possible job cuts earlier yesterday, saying this would form part of a major restructuring at its strike-hit operations.
The company would close four shafts and sell a mine considered unsustainable, it said.
"As a result of the proposed changes to the business, a total of up to 14000 jobs may be affected, 13000 of which will be in the Rustenburg area."
Shabangu said her department was approached by Anglo American last year to say it was facing problems and considering restructuring. She said the company was told to discuss any such plans with the department.
Yet, the company waited until seven days ago to do so.
Shabangu said her department regretted the conduct of Anglo American in such important business decisions that would impact on South Africa's economy.
She said miners and their families would be hugely affected by such retrenchments as there tended to be minimal work in and around Rustenburg.
"It tends to create a grim future for those workers."
The company's plans to find work for retrenched workers in fields such as brick-laying were not sustainable.
"You can't train at the tail end of everything ... those skills [would not be] created in a sustainable way. They must not talk about sectors they do not understand," she said.
Amplats chief financial officer Bongani Nqwababa said the cost of the restructuring, including the retrenchment packages, care and maintenance costs as well as the social investment plan to offset the job losses, would be R3.2-billion.
Of that amount, R1.2-billion would be for retrenchments.
He declined to say whether Amplats would pay a dividend when it announced full-year results on February 4.
Amplats has warned it will report losses in its results, compared with profits a year earlier. This is largely because of a two-month strike at its Rustenburg and Union operations last year that cost the company 306000 ounces in production.
The National Union of Mineworkers (NUM), which has lost support on mines around Rustenburg, said it would talk to Amplats about the proposed job cuts, which are the subject of a 60-day regulatory process entailed in the issuance of a Section 189 notice by the company.
"The NUM will engage the company in a bid to save these jobs and appeals to workers to work together to safeguard their own jobs," NUM general secretary Frans Baleni said.
Amplats said it would try to create 14000 new jobs to offset those lost in the restructuring after a year-long review. It would give "a comprehensive package of support to any affected employees and communities".
In its job-creation initiatives, Amplats would focus on infrastructure, housing and small business development in and around Rustenburg and in areas from where it drew its workforce.
An extensive review of the business was started in February last year to address growing concern within Anglo American about the poor financial returns it was seeing at its 80%-held subsidiary.
Moribund platinum prices, weak demand for the metal – particularly from Europe, the leading user of platinum in autocatalyst manufacturing – and rising costs in South Africa were eroding profits. "The continued operation of unprofitable shafts within the current configuration, and in light of the company's revised demand and cost expectations, is not sustainable," CEO Chris Griffith said.
The restructuring began long before the labour unrest. "This is not a reprisal for the strikes at the end of last year," Griffith said.
The NUM also called on its partners within the Congress of South African Trade Unions to oppose tariff hikes proposed by Eskom.
The steep escalation in electricity prices in recent years has eroded profits across industries.
"The tariff increase, if granted, will have disastrous effects on jobs and the economy at large," Baleni said. – BDlive, Sapa and Reuters