Amplats: Mining in financial distress

2012-11-02 07:58

Johannesburg - South Africa's platinum industry is in "severe financial distress" and high wage settlements to get wildcat strikers back to work will lead to job cuts, Anglo Platinum [JSE:AMS] said.

The world's top platinum producer said it was losing production averaging 3 694 ounces of platinum per day due to a strike at its South African operations that is in its seventh week. To date 141 640 oz of the precious metal have been lost.

"This is completely the wrong time to be offering unsustainable wage increases that the moment people are back at work you just have to (lay off) a whole lot of people," the firm's chief executive Chris Griffith told Talk Radio 702 On Thursday.

"There will be implications for jobs," he said adding that Amplats could not "negotiate in a climate of anarchy".

Amplats' parent company Anglo American [JSE:AGL] has already placed its four Rustenburg mines "under review" - management-speak for their possible closure.

Layoffs in the mining industry were a prime factor behind a rise in unemployment in the third quarter that left more than one in four of the labour force out of work.

Months of unrest in the mines have hit platinum and gold output, threatened growth and drawn criticism of President Jacob Zuma for his handling of the most damaging strikes since the end of apartheid in 1994.

But the number of strikes has dropped in the last two weeks amid management threats of mass dismissals and some payment sweeteners.

Amplats said last week it had reached a deal with several unions and would be offering incentives such as one-off hardship payments of R2 000 to end the strike that has crippled production.

But the workers turned down the offer, saying Amplats should match a salary increase of up to 22% offered by rival Lonmin after a violent wildcat walkout at its nearby Marikana platinum mine in August.

The Lonmin offer came after the police killing of 34 miners on August 16, the bloodiest security incident since apartheid.

Lonmin, the world's third-largest platinum producer, is scrambling to get back on its feet after the violent six-week strike that crippled production and led it to ask shareholders for $800m in a rights issue on Tuesday.

The company also gave unions notice of a restructuring, with proposed job losses in its 25 000-strong work force expected to be implemented in early 2013.

Striking workers at gold firms including AngloGold Ashanti [JSE:ANG] and Gold Fields [JSE:GFI] returned to work last week after threats of mass dismissals and an offer of a small pay increase.


  • matshobana.siziba - 2012-11-02 08:03

    Milking a cow that you are not feeding..this is the result.Who suffers the most now!

      altusvanzyl - 2012-11-02 08:04

      I agree fully.

      nicholas.graan - 2012-11-02 08:21

      This is what happens when you have a government that allow Marxist trade unions to run the show. Then when job numbers start dwindling they start toughening up the BEE laws.

      dewalds3 - 2012-11-02 09:36

      Good comment!

      kgolane.thulare - 2012-11-02 10:15

      Milking a cow that you are not feeding..this is the result.Who suffers the most now! Clearly corporations have been milking the workers and not feeding them ...

      andre.vandeventer.16 - 2012-11-02 11:43

      Same as the non-thinking elements who burn the trains because they are running late and then strike the next day because there aren't any trains running!

  • lourens.beytell.3 - 2012-11-02 08:07

    Everything must say "Since Apartheid". I am so sick of this freeken goverment that can't do their job, and then blame it on the past. Eish!

      kolobe.mzansi.7 - 2012-11-02 08:48

      if the west is tired of mining in SA they should let the east takeover

      matthew.keegan.71 - 2012-11-02 09:06

      @kolobe.mzansi.7 And what makes you think the "east" a.k.a China/Forced Labour Inc. would do any better?

      teresa.correia.7583 - 2012-11-02 09:07

      Kolobe, you don't know how the Chinese operate. I've been to Angola and have Angolan friends. China offers credit lines to Angola, in return for massive construction deals where they brng their own unkilled Chinese workers. No Angolan nationals are employed. In the very few instances where Chinese companies emply Angolan nationals, they are paid extremely low salaries and have to submit to bad working conditions. Chinese traders have invaded not only big towns but even tiny villages, to the extent that it's hard for Angolan hawkers to make a living. Large tracks of land in Southern Angola are being sold by the government to Chinese companies, with the result that Angolan peasants don't have common pastures for their cattle as they used to for thousands of years. Please don't make the mistake of thinking that China will benefit South Africa. On the contrary, China thinks how IT can benefit, to the detriment of the people on the ground. I will not be surprised if we see anti-China feelings by common people in Africa (as opposed to African governments and leaders) grow in the continent. This is already starting to happen in Angola!

      pieter.calitz - 2012-11-02 09:28

      Brilliant kolobe. Maybe not such a bad idea. They can then fire all the workers and replace them with chinese. The workers are getting paid much more the wages in China so the chinese would be very happy to work for that.

      damien.bako - 2012-11-02 10:04

      @kolobe I couldn't agree with you more let the east take over - then you will see what working for nothing really means. U r so clever....

      dorette.forrester - 2012-11-02 13:59

      Kolobe - be very careful what you wish for!!

      timothy.tanzer.5 - 2012-11-07 09:58

      @kolobe you have no idea what you are wishing for.... there will be no jobs for any Africans while the Chinese are around.... and your beloved politicians and leaders will not care because they would have been paid off... anyways, we can all say 'i told you so' together when South Africa is in ruin

  • sean.odonnell.1466126 - 2012-11-02 08:10

    Now Zuma will have to 'create' even more jobs....

      gerald.parker.3956 - 2012-11-02 08:22

      He can employ them at Nkandla

      richard.bosmano - 2012-11-02 08:40

      Those 60000 extra car gaurds arn't getting a cent from me

  • bruce.williams.1044186 - 2012-11-02 08:12

    There is no leadership in this country at the moment. The miners have won the first battle and now they want to begin the war and an industrial revolution. The industry has smelt the blood and now they all want their share.

      colin.dovey - 2012-11-02 08:52

      I know what YOU mean about creating an "Industrial Revolution" - but in truth, the ORIGINAL Industrial Revolution in the UK marked a major turning point in history; almost every aspect of daily life was influenced in some way. Most notably, average income and population began to exhibit unprecedented sustained growth. The economy provided the legal and cultural foundations that enabled entrepreneurs to pioneer the industrial revolution. Starting in the later part of the 18th century, there began a transition in parts of Great Britain's previously manual labour and draft-animal–based economy towards machine-based manufacturing. It started with the mechanisation of the textile industries, the development of iron-making techniques and the increased use of refined coal.Trade expansion was enabled by the introduction of canals, improved roads and railways. With the transition away from an agricultural-based economy and towards machine-based manufacturing came a great influx of population from the countryside and into the towns and cities, which swelled in population. The way things are going right now, with this pathetic ANC Government, is that the opportunities for jobs for the people are becoming more negative by the DAY!

  • jaco.bruwer.73 - 2012-11-02 08:22

    What do U expect, if U force your employer to give U outrages increases the company will suffer in the long term. it will either be force to lay-off workers or close indefinitely. If mines start to close, U can forget about any overseas inverters coming to SA. Which intern will force the rand to drop. And every one knows what the implications of this will be. There will be a huge Price increase in petrol and transport. This will put immense pressure on South Africans to just stay afloat.

  • mshiniboys - 2012-11-02 08:23

    Thats great let us see if the ceos will get their 20 milion wage this year.

      raymond.buis.3 - 2012-11-02 08:29

      They might not get massive bonuses but they will still have a job. Unlike a whole lot of the strikers.

      sean.odonnell.1466126 - 2012-11-02 08:35

      mshini.... what you and many others fail to grasp, is that the top management skills at these mines will be lapped up by the industry in many countries throughout the world. So, while it may prove to be a minor inconvenience to them to change jobs or move to another country, they will still be earning a highly paid salary due to their skills. On the other hand, the workers will all be incomeless and the economy will take a severe blow.... Try to see the big picture my friend.

      frans.vanderpoll - 2012-11-02 08:45

      These CEOs unlike the strikers are highly educated people and will get another job that pays a salary linked to their qualifications. Can you say the same of the strikers fool?

  • alex.andrade.739326 - 2012-11-02 08:23

    Yeah and those poor strikers are now going to suffer the most, maybe they should have thought of that before acting like idiots, look at the corrupt owners instead of just always blaming it on racism idiots. Until the grass roots wake up and see how they are betrayed by their own officials and vote for change not race they will suffer.

  • collet.letsoalo - 2012-11-02 08:24

    These workers will one day sober up when they are out of work.

  • bosveld.reaper - 2012-11-02 08:49

    Like a little puppy, it will eat all the food presented to it. Tomorrow it will sit before its empty "begging" bowl and wonder, why is it empty.

  • wikus.schalkwyk - 2012-11-02 08:56

    One person's retrenchment, is another's job opportunity.

      ken.grimblegrumble - 2012-11-02 10:35

      Wikus if only that were true. A lot of these jobs will disappear. Marginal mines are closing down and there are few new projects. It's a lose lose situation. Yes the mines will re employ but a lot of these striking 'werkers' will never be replaced. One of the options for International Investors is to work out the existing mines until they become unprofitable, and walk away to some other country that wants investment.

  • jacqui.c.baumgardt - 2012-11-02 09:00

    the workers only have themselves to blame

      khethu.ndlovu.3 - 2012-11-02 09:29

      Thats not true and u know it, exploitation and greed is to blame, that is if u are bent on blaming anybody

  • norman.buchalter - 2012-11-02 09:45

    This restructuring leading to probable retrenchments is very sad. But inevitable. When forced to fork over 22% increases and not deal through recognised bargaining structures(and we won't go into why management did that- guilt or co-ercion) , it is the only outcome that could be predicted about Marikana. Even the outcome of the commission is not predictable and will probably make suggestions that now come too late. Similarly, if the local , provincial and national governments ensured that proper socio economici conditions were in place, and that everyone acted reasonably, this would reduce the unfortunate decline of the country which directly affects the pockets and living conditions of people like the miners. (regardless of the fact that miners might be sending money home to the Eastern Cape, to their needy families, rather than using it to upgrade or stay in better hostels- as intended with these allowances they have been paid by Amplats). My point being that when councillors co-erce the City manager here in Buffalo City, to illegally pay them increases etc, to the tune of 12million, this is just an indication of the endemic corruption in public service in an Aen C led metropolitan area. Though it has allegedly been agraid that this was illegal and that the R12mill will be paid back by these councilors, will it actually happen? I doubt it unless the Press and media keep up the heat. If it's happening at this level, and continues to do so, will we ever learn?

  • clive.kihn - 2012-11-02 09:46

    Is there no one in the union leadership - such as it is - who can explain to these people that higher wages MUST result in fewer jobs? Or is it the unions who are exploiting the situation for their own ends. How many people will have nothing to celebrate this Christmas because of pig-headedness?

  • quarty.vanzyl - 2012-11-12 08:13

    So the mines will increase the salaries but because of that will have to lay off workers .The strikes will start all over again etc. A catch 22 situation!

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