AngloGold job cuts prelude to further job losses

AngloGold’s move to cut thousands of jobs could be part of the next wave of job losses in the mining sector. Since 2012, the local mining sector has shed more than 70 000 workers.

Leon Esterhuizen, a Nedbank corporate and investment banking analyst, said that he expected more jobs to be cut in the local gold and platinum mining sectors due to the decline in the prices of these precious metals.

AngloGold Ashanti’s share price has dropped since the company said it would restructure its two mines and cut as many as 8 500 jobs.

Once the restructuring is complete, AngloGold will have just two main mines – Moab Khotsong near Klerksdorp and Mponeng in Carletonville. The company will have the remnants of the TauTona gold mine in Carletonville, as well as the surface mining operations.

Prior to the news of the job cuts, AngloGold’s share price closed at R132.23 and, by Friday, the stock was quoted 2% weaker at R129.49.

Esterhuizen said that the decline in AngloGold’s share price following the news of the restructuring was due to worries about the new Mining Charter as well as the decline in the gold price.

On Friday, the rand per kilogram gold price was quoted at R529 000, down from R650 000 at the end of June last year.

Esterhuizen said the move to place the Kopanang mine near Orkney on care and maintenance, and to close the Savuka mine and sections of the TauTona mine in Carletonville, was expected by investors as the mines had been making losses.

He said that if the gold price continued to fall, AngloGold might need to cut more jobs.

On Friday, the rand per ounce platinum price was quoted at just more than R12 100, down from just more than R16 000 at the end of June last year.

The companies that Esterhuizen said would possibly also cut jobs included Lonmin, Sibanye Gold and Impala.

Harmony Gold could cut some jobs, especially if the turnaround at Kusasalethu did not deliver the desired results, but the company had already been restructured.

Labour analyst Andrew Levy said he expected more job cuts in mining due to the tough economic environment, low productivity, industrial action and upward pressure on wages in the sector.