Bokoni Platinum, the joint venture between Anglo American Platinum (Amplats), and Atlatsa Resources, has given notice of its intention to retrench 2651 workers, signalling the latest blow to jobs in the mining industry, the National Union of Mineworkers (NUM) announced yesterday.
This as Amplats recorded R2.2billion of asset write-downs in the first half, leading to a 55percent drop in headline earnings to about R750million.
The NUM said it feared that figure for the notice to retrench was much higher as the 2651 figure excluded contractors, adding that it had been served with a Section 189 notice of the Labour Relations Act with the intention of placing the company under care and maintenance - a move which it planned to oppose.
“The decision by Bokoni Platinum will lead to a high rate of unemployment in surrounding communities and dozens of families would be plunged into poverty. We call on Bokoni Platinum to return the mining licence to the Department of Mineral Resources so that interested companies must take over. This company does not have the interest of the workers and the surrounding communities at heart. They only care about profit,” said Phillip Mankge, NUM North East regional secretary.
Mankge also said that the mine had cited financial problems for placing the operation on care and maintenance.
“However, the company did not engage with the union on the process to embark on a cost saving mechanism, so, therefore, we are not convinced why would the mine want to take this harsh decision to close the mine,” he added.
Amplats, the world’s biggest platinum producer has a 49percent stake in Bokoni, which has been bleeding cash for years, while Toronto and JSE-listed Atlatsa owned 51percent in the mine.
Atlatsa told the market on Friday of the decision to put the mine on care and maintenance, saying that the joint venture partners had pulled the plug on funding the mine as part of a deal that will see the write-off of R4.2bn in debt.
Atlatsa shares were also suspended on the JSE on Friday.
Earlier yesterday, Amplats chief executive, Chris Griffith, said Amplats had agreed to fund, through a loan account to Bokoni, all once-off costs associated with placing the mine on care and maintenance, as well as ongoing care and maintenance costs up until December 31, 2019.
Griffith also painted a bleak picture of the negative impact of Bokoni on the group, saying its equity interest was fully impaired at December 31, 2016, amid the difficult environment for platinum.
During the first half of 2017, after capitalising 49percent of funding provided to the mine, Amplats equity accounted losses of R161m and impaired the remaining balance of R45m.
“Atlatsa’s ability to service its debt obligations in the context of the current market conditions, where Bokoni Platinum Mine is its main source of funding, is doubtful. Amplats has impaired all but R201m in funding provided to Atlatsa. This resulted in an impairment loss for the period of R214m, which is included in headline earnings,” he said.
Rene Hochreiter, a mining analyst at Noah Capital Markets, said it was over for Bokoni.
“Things have not been working at Bokoni. It is going to get mothballed after approval from the Department of Mineral Resources. At this stage Bokoni is a waste of money,” he said. Go to page 17 for Amplats results.