Implats said the continuing slump in commodity prices and high production costs had forced it to weather huge losses at its ageing mines, particularly in the country's platinum belt of Rustenburg.
The miner said it would reduce its labour complement of employees plus contractors from approximately 40000 at the end of 2018 financial year to 27000 over the two-year implementation period.
It would also cut its operating shafts from 11 to six and cut future production from 750000 platinum ounces a year to 520000 ounces.
Chief executive Nico Muller said the strategic review implementation would cost Implats R6billion.
Muller said the only option for conventional producers today is to fundamentally restructure loss-making operations to address cash-burn and create lower-cost, profitable businesses.
“While employee rationalisation is inevitable in a restructuring process of this nature, due care will be taken to ensure that job losses are minimised as far as possible through a range of job loss avoidance measures,” Muller said.
The restructuring plans attracted a stinging rebuke from Mineral Resources Minister Gwede Mantashe, who accused Implats of negotiating in bad faith.
Mantashe said the miner had not kept to the spirit of its agreements with stakeholders and urged it to reconsider the decision.
“We proposed - to which Implats management agreed - that they should engage on the basis of a Section 52 of the Mineral and Petroleum Resources Development Act,” Mantashe said.
“The team intended to undertake this process with the company is yet to be announced, and Implats has run off to announce retrenchments.”
The news come just days after Statistics South Africa revealed that the manufacturing sector lost 108000 jobs in the second quarter while community and social services shed 96000 and trade 58000 jobs.
The mining sector fell 9.9percent during the first quarter, mainly due to lower production of gold, platinum group metals and iron ore.
The National Union of Mineworkers (NUM) said it was shocked at the planned retrenchments at Implats.
NUM deputy president Phillip Vilakazi said the company should explore other avenues.
“Retrenchments have become something of an excuse for the mining companies who are typically insensitive to the plight of workers and their families, especially with the unemployment rate in the country sitting at 27.2percent,” Vilakazi said.
Asief Mohamed, chief investment officer at Aeon Investment, said lower platinum prices and increasing costs of production had made platinum mining unviable.
“The 'free carry' in the draft mining charter is another cost that may make mining in South Africa less sustainable. Workers in the mining sector bear a disproportionate cost due to significant job losses,”
Implats shares have slumped 41percent in the past six months and a massive 80percent in the past five years.
In May, dual-listed Lonmin, which is being bought by Sibanye-Stillwater, announced that it would retrench more than 3000 jobs in the current financial year as part of its plans to release 12600 workers in the next three years.
AngloGold-Ashanti is also said to be planning to retrench 2000 employees in its local operations. Connie Prinsloo, the deputy general secretary of Solidarity, said mining houses are no longer prepared to carry the “pain of financial losses” while waiting for market conditions to improve.
“This is a battle between the mining houses, the government and the global economy, and unfortunately, employees are often caught in the crossfire,” Prinsloo said.
Implats shares closed 3.32percent higher on the JSE yesterday at R19.89.