Johannesburg - Anglo American Platinum Ltd., the largest producer of the metal, would do better to see out the strike at its South African mines than give in to workers’ demands over job cuts, Coronation Asset Management Ltd. said.
“It is better in the long-term interest of the business to take a strike to establish a realistic wage base and to put the company in a profitable position,” Neill Young, an analyst at Cape Town-based Coronation, said by telephone yesterday.
Mines run by Anglo American Platinum, the Johannesburg- based company known as Amplats, will stand idle for a fourth day today as members of the Association of Mineworkers and Construction Union protest proposals to cut 3,300 jobs, union President Joseph Mathunjwa said by phone.
The AMCU will meet Amplats again tomorrow for talks, he said.
The AMCU, the largest union at Amplats, is challenging a decision by the company to consolidate five mines into three at its Rustenburg complex.
The sites are losing more than 1 billion rand ($99 million) every six months, chief executive Chris Griffith said August 30.
Plans to cut as many as 14,000 jobs, announced in January, were scaled back following pressure from unions and the government.
Amplats has no choice other than to implement the job cuts, Des Kilalea, an analyst at RBC Capital Markets LLC in London, said by phone.
“This is a business that in its current structure doesn’t work,” he said.
“They’re going to lose money either way.”
Mpumi Sithole, a company spokeswoman, wasn’t available to comment today when contacted by phone.
The National Union of Mineworkers, which was unseated by the AMCU as Amplats’s biggest recognized union in March, has also sought to halt the planned job cuts.
A Johannesburg court yesterday reserved judgment in a case brought by the NUM to prevent the cuts, union spokesman Lesiba Seshoka said by phone.
Less than 20 percent of workers reported for duty at the company’s mines in the North West province on the first day of the strike, Amplats said in a Sept. 27 statement.
Operations at the company’s processing division weren’t interrupted, it said.
Amplats reported a loss of 1.47 billion rand for 2012 and kept its dividend suspended. Anglo American Plc, which owns a 77 percent stake, will close or sell more of the platinum company’s mines if profit doesn’t improve next year, chief executive Mark Cutifani said Aug. 29.
“I’d expect that we can see the turnaround and that we can see it on the ground next year,” Cutifani said.
“At the end of the day, if we have shafts or operations that don’t make money, then we’ll make the tough calls.” - Bloomberg News