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Carroll: Amplats has to restructure

Feb 05 2013 16:35 Sapa

Amplats mineworkers at a previous strike. (Picture: Lucky Nxumalo/City Press)

Company Data

Anglo American Plat Ltd [JSE:AMS]

Last traded 491.33
Change 2.85
% Change 0.01
Cumulative volume 122086
Market cap 132.50bn

Last Updated: 16/04/2014 at 04:30. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town -  Anglo Platinum [JSE:AMS], the world's largest producer of the metal, has to be restructured to make it viable for the future, outgoing Anglo CEO Cynthia Carroll said on Tuesday.

The platinum sector was in crisis, facing enormous economic challenges, she told delegates at the Mining Indaba 2013 in Cape Town.

On Monday, Amplats reported a headline loss of R1.47bn for 2012, a fall of 141% from the year before. It also announced it would not be paying a dividend.

The loss has been attributed to, among other things, the unprotected wage strikes that rocked the company's mines last year.

Amplats has announced plans to retrench 14 000 workers, but recently postponed these to hold talks with government and labour.

Referring to "government and political parties" as partners, Carroll said a "defining context for the relationship between Anglo American [JSE:AGL] and its partners in the months ahead will clearly be the consultation process in relation to our platinum restructuring proposals".

While a conference platform was not the place to conduct such consultation, she wished to "make the position clear" on a topic that had attracted so much media coverage.

"The critical starting point is that the boards of Anglo American and Anglo Platinum are totally committed to ensuring a sustainable platinum business for the future - for the benefit of all stakeholders" she said.

It was a business in which Anglo [JSE:AGL] planned to invest R100bn over the next decade.

"But to do that we must make the changes necessary to make the business sustainable. We need to recognise and tackle the enormous economic challenges the platinum sector faces. This is an industry in crisis" she added.

Demand for platinum had dropped, and there was no sign of respite in the near-term future. At the same time, labour, energy costs, and other input costs had continued to rise relentlessly.

"As a result, margins have been squeezed dramatically and the sector has not been earning adequate returns. This is an unsustainable position.

"In the case of Anglo Platinum, we have to restructure the business to make it viable for the future and, in doing so, to protect over forty-five thousand jobs" said Carroll.

The question of how to restructure was one that required consultation with all stakeholders.

"As you know, we have made our proposals public, as we are required to do as a listed company.

"We are targeting to create at least as many jobs as the 14 000 that may be affected by the restructuring. And that is on top of a target to re-deploy nine thousand of the employees who may be affected" said Carroll.

Carroll also added that Anglo was "totally serious" in its intent to create jobs.

"We will provide high-quality training, as soon as it is needed, to enable employees to benefit from the re-deployment (sic) and new job opportunities we will create."

She said restructuring was always painful and difficult.

"We value the opportunity to engage with our partners. Over the next sixty days, we will work collaboratively with the department of mineral resources and the trade unions to explore the way forward.

"And after that, the formal Section 189 consultation will resume for the following sixty days.

"In addition, we will continue to be active participants in the MIGDETT [the mining growth, development and employment task team] discussions about the challenges facing the platinum sector as a whole.

"These are all important processes, which we are approaching with good faith and with serious intent," Carroll said.

amplats  |  cynthia carroll  |  mining indaba
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