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Impala could cut more than 1 000 jobs at SA Mine

Apr 26 2017 08:19
John Bowker, Bloomberg News

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Last traded 112
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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Impala Platinum [JSE:IMP] said protests at its Marula mine in northeast South Africa and low metal prices had led the world’s second-largest producer of the metal to start a reorganization process that could lead to more than 1 000 job losses.

The mining regulator and relevant labor unions have been contacted and all parties will work together to minimize the impact of the plan on employment, the Johannesburg-based company said in a statement on Wednesday.

Impala expects the negotiation process to be completed by the end of June, it said.

“This is something the business and economy can ill afford, but remains imperative if we are to protect the financial viability of our business and preserve jobs as far as possible,” CEO Gerhard Potgieter said in the statement.

The decision comes as the South African government struggles to reduce unemployment, which was 26.5% in the fourth quarter of last year. Platinum miners have battled with low metal prices and demands for higher wages and living standards from their workers, while members of communities surrounding the mines have protested at a lack of housing and jobs.

Community ownership

Marula employs almost 4 400 workers and contractors, according to Impala’s website. The company reduced its annual production forecast for the site in February due to protests in the community, which owns a 9 percent stake in the mine through a local trust.

The protest action that’s led to the reorganization is related to community dissatisfaction with the way its 50% interest in the Makgomo Chrome project is being managed, Impala said. Chrome is a waste product of platinum. Marula’s production was also affected by the closing of a hybrid mining section at one of the shafts.

Impala said third-quarter refined platinum output dropped to 331 000 ounces from 353 000 ounces a year earlier, while full-year guidance was maintained at 1.5 million refined platinum ounces. At Marula, production of platinum in concentrate for the quarter decreased by 47% to 9 000 ounces.

The stock fell 0.3% by 9:15 in Johannesburg on Wednesday. That pared gains this year to 2.4%, compared with a 9.4% advance on the FTSE/JSE Africa Platinum Index.

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