The South African platinum industry is headed for another showdown as stakeholders vow to fight Anglo American Platinum (Amplats) plans to shut down a significant portion of its operations.
Amplats unveiled its long awaited restructuring plan today which could see loss of about 14000 jobs. Trade unions and government reacted angrily to the Amplats plan saying the groups restructuring appeared to be illegal and insensitive to interests of other stakeholders the country and workers.
Amplats plans to shut down a couple of shafts in around the Rustenburg area and also announced intentions to dispose other assets. The group is following up an announcement made in February last year where it promised to review its operations which have been hit by lower platinum prices, rising costs and a collection of other obstacles. Challenges to these operations mounted after the Rustenburg platinum mining operations were visited by a series of wildcat strikes which halted operations for a couple of weeks during the second half of last year.
Amplats CEO Chris Griffith was at pains to emphasise that the group’s plan was not a reprisal arising from last year’s wildcat strikes. He said the plan came out of a yearlong review process launched in February last year and was a response to structural factors. “The platinum business has attractive underlying fundamentals, but we are facing tough decisions to restore profitability to our operations, said Griffiths. “We must evolve to align the business with our expectations of the platinum market’s long-term dynamics and address the structural changes that have eroded profitability over time. We have reviewed our business across the entire value chain, building upon the steps taken to improve operational performance in recent years, and will be consulting extensively with our stakeholders in relation to our proposed changes”.
“We have designed a comprehensive social plan to ensure that we can compensate for any necessary labour restructuring and make a positive difference through job creation. By creating a sustainable, competitive and profitable business, we will be in a stronger position to continue substantial investment, provide more secure and stable employment and to benefit our customers, suppliers, shareholders”. Griffiths said the group was looking at facilitating the creation of about 14000 new jobs which will mean that the restructuring will be jobs neutral in the final outcome.
Unions and government were having none of it. The minister of mineral resources Susan Shabangu led the angry responses saying the Amplats plan was cause for major concern. Her departmental statement suggested that Amplat’s plan was an undesirable unilateral move. “It is regrettable that the company consulted with the department less than seven days ago despite the major socio-economic ramifications of its decision. The department regrets the behavior by Anglo American on how the company relates and undermines the regulator on such important business decisions which impact on the country’s economy”.
“This behavior has indeed undermined the tripartisan relationship the DMR has sought to build over the years with mining companies through its stakeholder forum MIGDETT”.
“The DMR is also concerned about the extent of compliance with regulatory requirements on inter alia, establishment of future forums in terms of section 52 (Regulation 46 (d)) of the MPRDA on downscaling and large scale retrenchments”.
“It seems perverse that Anglo American Platinum’s announcement is very silent on the importance of regulatory compliance as a basis for the sustainability of its business”.
In this regard the department will undertake a comprehensive investigation on the various aspects as announced in their statement.
The DMR said Amplats’ old order rights were converted in 2010 and granted for a period of thirty years on strength of a mining works programme that justified the period of non interrupted and optimal exploitation.
“Anglo American Platinum imposed large scale retrenchments in 2009 and today’s announcement seems to present a pattern of unsustainable business decisions linked to change of leadership in the company”.
The National Union of Mineworkers (NUM) has vowed to oppose Amplats’ plan saying the group was misleading the group in promising to create 14000 jobs. NUM said the argument that the company will destroy 14000 jobs and parallel to this create another 14000 jobs was illogical.
Trade union UASA said it will fight tooth and nail to defend its members’ rights. “The process Amplats intends to follow is flawed and not in accordance with labour legislation.
“The announcement of the possible retrenchment of 14 000 workers is premature in terms of section 189 (3) (b) since the affected workers have already started receiving notification and UASA, and presumably other unions, have not been consulted yet. This means the process Amplats is following is not according to the Labour Relations Act. UASA urges Amplats to follow proper procedures or face the consequences”.