The South African mining jobs bloodbath continues as Wesizwe Platinum yesterday issued a section 189A at Bakubung Minerals, which could effect 571 employees out of 761, as it embarks on the possible restructuring of its operations amid a downturn in metal prices.
The shares in the miner dived as much as 15% on the news to a low of 51 cents. By 1.33pm Wesizwe’s shares yesterday were 10% lower at 54c on the JSE.
Wesizwe said the contemplated retrenchment consultation process had further been compounded by the downturn in the mining industry as well as the two community strikes in the years 2022 and 2023 and the recent five-week unprotected strike in July, which affected the mine development progress adversely. The mine only reopened on August 21 after the company and employees forged a deal to end the strike.
The mining sector also faces various challenges such as currency fluctuations, high inflation, power blackouts, and logistical issues in mineral exports due to the deterioration of road, rail, and port infrastructure.
“The initiation of the section 189 consultations comes at the backdrop of the decision by the board of directors to approve changes from hybrid mining method to board & pillar mining, which will see a reduction in the number of employees needed to establish and maintain the required production profile in the business plan,” the platinum-group metals (PGM) miner said in a statement yesterday.
“As part of its endeavours to improve efficiencies, Bakubung is of the view that there is a need to restructure in order to ensure efficient and effective operation of its business and in doing so, achieve reduction in operating expenditure. The possible restructuring could potentially affect 571 employees. The number includes employees at different staff levels in all areas of the business,” it said.
Through the formal section 189 consultation process, which would be facilitated under the auspices of the CCMA, the company and affected stakeholders would together consider measures and alternatives to avoid and mitigate possible retrenchments.
However, the preliminary view of Bakubung was that there did not appear to be any alternatives available owing to the fact that continuing with the status quo of the current headcount of 761 employees would not be a reasonable and/or viable alternative because it would not address the current state of Bakubung and the need to implement measures to improve efficiencies and to ensure that Bakubung is placed on the path of profitability and growth, it said.
“As things stand Bakubung has already stopped overtime and weekend work, did not renew contracts of mining contract services and fixed-term contracts of non-critical staff and placed a moratorium on recruitment of non-core and critical staff with the aim of reducing the bloated structure that causes inefficiencies,” it said.
Bakubung would continue to engage with all relevant stakeholders in an attempt to limit the impact on the remainder of the operations and employees at Bakubung.
Wesizwe Platinum said in the past it was developing Bakubung platinum mine to access one of the last remaining sizeable and viable Merensky and Upper Group 2 (UG2) chromitite layer PGM ore bodies. The mine has an estimated life-of-mine of 30 to 35 years.
Wesizwe is not alone in contemplating jobs cuts. At the weekend Bloomberg reported that Anglo American is contemplating job cuts at two South African units due to declining PGM prices and iron ore export bottlenecks, insiders revealed.
Earlier this month Impala Platinum said it was offering voluntary job cuts to workers at some of its PGM shafts in South Africa due to weak metal prices, according to Reuters.
In September Sibanye-Stillwater announced a restructuring exercise that could catastrophically cull nearly 3 000 jobs under its South African gold operations, while this year global commodity trading giant Glencore has begun a retrenchment process at its iMpunzi coal complex in Mpumalanga, which has 1 138 permanent employees, due to problems with Transnet.