South African mining company American Platinum planning to implement a restructuring that may affect 3,700 jobs across its South African operations, driven by the fall in metal prices.
American Platinum said that a restructuring process will be commenced as a last resort under Section 189A of the Labour Relations Act 66 of 1995 (S189A).
The process is expected to impact around 17% of the workforce across the business, along with 620 service providers, who have contracts with the company, currently in scope for review.
It will involve a period of consultation with stakeholders including trade unions and other affected non-unionised employees.
In December last year, American Platinum’s parent Anglo American warned that returns for miners of platinum-group metals were at the lowest level in 30 years.
American Platinum acting chief financial officer Sayurie Naidoo said that the company is targeting annual savings of R5bn ($263m).
American Platinum CEO Craig Miller said: “As was the case in 2022, our profitability continues to be impacted by lower PGM prices and above-inflation cost increases in utilities and consumables.
“As outlined in December’s investor update, in response to external pressures due to the low PGM basket price, we have embarked on an action plan of cost reduction measures targeting a R5bn in operating cost saving and a further R5bn saving in stay-in business capital spend by focusing only on critical work to ensure the integrity and reliability of our assets.
“The action plan includes various measures, including an organisational restructure aimed at ensuring the delivery of an enhanced cost position, improved near-term cash flows and value-focused capital allocation.”
According to the company, PGMs are used in gasoline and diesel vehicles to reduce emissions.
The price of platinum group metals (PGMs) has started to plunge since last year, due to destocking in the automobile industry and a subdued global economy.
The company’s profit declined by 73% to R13bn last year, from R49.2bn in 2022.
According to Bloomberg report, Impala Platinum and Northam Platinum also reported a decline in earnings, with Impala Platinum offering voluntary redundancies.
Last year, Sibanye Stillwater announced that it was in talks with labour unions over a restructuring that could impact more than 4,000 workers at its platinum mines.
The South African miner will take measures to support the employees through the restructuring process, along with a comprehensive social impact mitigation programme.
Miller added: “We fully acknowledge that this process, which will affect approximately 3700 (approximately 17%) of our employees and 620 contractors who are in scope, will have a socio-economic impact on them, their families and communities.
“These actions are necessary to continue the employ of thousands of workers and contractors who will continue to add value for our stakeholders – through salaries, taxes and royalties, as well as procurement of goods and services from local suppliers.
“We will approach and implement the process in line with our values and cultural commitments through centring our people and the impact this will have on them.”
