Implats weighs 3,900 job cuts in South Africa as price rout takes toll

Implats weighs 3,900 job cuts in South Africa as price rout takes toll

By Reuters

Impala Platinum (IMPJ.J) could cut 3,900 jobs as it restructures its South African operations due to lower metal prices, the miner said on Friday, with the news likely to pile more pressure on the government weeks before a general election.

Mining companies in the world’s top platinum supplier are shelving expansion projects, closing some operations, and letting go of thousands of workers in a bid to preserve cash as some metal prices plunge.

Implats said it was resorting to jobs cuts as its cost savings, deferment of capital projects, and a voluntary severance scheme had “not sufficiently offset the impact of persistently lower prices” on the business.

Platinum is 7% down so far this year, while palladium is 10% lower since the beginning of the year.

“This has significantly undermined Implats’ financial position, which in turn threatens future job security for the entire workforce,” Implats CEO Nico Muller said in a statement.

South African miners have also been impacted by a myriad of local challenges including power cuts and a crisis at the state port and freight rail company.

Job losses are hot-button issues in the lead-up to the May 29 election, where polls suggest the African National Congress could lose its parliamentary majority for the first time since the end of apartheid.

Implats’ restructuring could potentially affect 9% of the miner’s workforce at its Rustenburg, Marula and the newly acquired Bafokeng operations. It also targets a 30% reduction in head office costs, the company said.

In February, Implats’ rival Anglo American Platinum (Amplats) (AMSJ.J) announced plans to lay off 3,700 people, while Sibanye Stillwater (SSWJ.J) has said it will cut about 2,000 jobs in its platinum operations.

Amplats’ parent company, Anglo American (AAL.L) rejected rival miner BHP Group’s (BHP.AX) $39 billion takeover proposal on Friday, saying the bid significantly undervalued the London-listed miner and its prospects.