Anglo American Platinum (Amplats) is following through on its proposal to reduce costs and reconfigure marginal operations following an extensive review of its business, which commenced in February 2012.
Following the consultation with the South African Department of Mineral Resources and recognized unions in a process facilitated by the Commission for Conciliation Mediation and Arbitration (CCMA), Amplats will:
- maintain baseline production to 2.2-2.4 million oz/y platinum in the short to medium term;
- consolidate the Rustenburg operations into three operating mines by integrating the Khuseleka 2 and Khomanani 1 and 2 mines into the surrounding mines. Khuseleka 1 will remain operational. The rationalization and reconfiguration of marginal operations will reduce production capacity by 250,000 oz/y and by an additional 100,000 oz/y in the medium term;
- consolidate Union North and South Mines into one mine. The disposal of the mine is still planned to take place in due course; and
- reduce overhead costs and improving efficiencies.
About 6,000 jobs will be affected and about 900 corporate and overhead employees will also be affected. However, the ultimate number of retrenchments will depend on the conclusion of the retrenchment avoidance measures, which include voluntary severance packages, early retirement, redeployments and the filling of internal vacancies.
“We are at a critical stage of the process and this restructuring will be a crucial step to enable us to return to profitability and to focus capital allocations on our mines that are best placed to sustain the business and create employment opportunities over the long term,” said Chris Griffith, CEO, Amplats. “A month's notice period for affected employees will commence on September 1. We are very aware of the impact this process has on our employees and we are working hard to finalize the details of our Social Impact Mitigation Plan aimed at minimizing the impact on employees and affected communities.”