Strike ‘not to blame’ for decision to disinvest

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Anglo American Platinum (Amplats) will disinvest from its Rustenburg operations and Union mine – a plan that has been a long time coming and should not come as a surprise.

Yesterday, chief executive Chris Griffith said the disposal plan should not be linked to the five-month strike led by the Association of Mineworkers and Construction Union (Amcu).

The strike ended last month after the platinum majors signed a three-year wage deal with Amcu, in which wages will increase by about R1 000 a month for employees whose basic salary is less than R12 500.

Griffith noted that the company had planned to pull out of Rustenburg even before the strike damaged the economy. “This [disinvestment] has nothing to do with the strike. It goes back to 2013 when we announced plans to restructure and reposition our company.”

Griffith said he would hold talks with labour on the proposed exit in due course, and would begin formal negotiations with prospective buyers for the assets.

The platinum producer signalled it was in troubled waters when it announced its major restructuring plan for its cash-burning operations last January.

The announcement followed the labour unrest in August 2012, during which 34 people were shot dead by the police on the hill in Wonderkop, near Lonmin’s Marikana operations.

At the core of the woes in the platinum sector are high costs, subdued demand and softening prices, all of which contributed to the company’s decision to overhaul its operations.

At the same time, the high expectations by labour unions and the hostility between the sector and the government have contributed to the challenges.

At the time of announcing the restructuring, Amplats initially said that 14 000 jobs would be affected, but the company revised the number of job cuts to about 6 000 following a backlash from organised labour and the government.

In its restructuring plan, the Rustenburg operations were reconfigured into fewer mines producing between 320 000 and 350 000 ounces a year in the medium term.

Amplats has consolidated the Rustenburg operations into three operating mines through the integration of Khuseleka 2 and Khomanani 1 and 2 into the surrounding mines. This resulted in a reduction of output to about 250 000 ounces a year last year and a further cut of 100 000 ounces a year in the medium term. – Dineo Faku


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