Amplats to close shafts, lay off 14,000 in South Africa

Johannesburg (dpa) – The world’s number one platinum producer Anglo American Platinum (Amplats) announced on Tuesday it was closing four shafts in northern South Africa, which could affect 14,000 jobs in the volatile mining sector.

Amplats would also sell its Union mines, though no clear buyer has been identified.

The announcement comes after violent wildcat strikes at key mines last year led to a severe drop in productivity. Mining firms have agreed to above-inflation pay rises for employees in order to end industrial actions.

Analysts have warned that margins were tight for several key companies, particularly in the platinum sector, cautioning that workers’ demands for higher wages could lead to layoffs.

“We are very shocked by the decision. We are appealing to workers to have unity and discipline to deal with this retrenchment,” Lesiba Seshoka, spokesman for the National Union of Mineworkers, told dpa by telephone.

NUM, the largest mining union in the country, has been facing challenges from the Association of Mineworkers and Construction Union (Amcu), a smaller, more militant umbrella group, which led some of the wildcat strikes last year.

NUM said it would enter into talks with Amplats in an effort to save the jobs. Labour Minister Mildred Oliphant told broadcaster eNCA that firms should “negotiate with workers first before taking a final decision”.

Mining analyst Peter Major said that Amplats, which has been planning a restructuring for over a year, was keeping the four shafts on care and maintenance, meaning they may be reopened at some point.

“This could just be an opening chip in some kind of bargaining,” Major said, referring to the Amplats announcement about jobs.

The platinum shaft closures will lead to a reduction in production of some 400,000 ounces a year, with Amplats setting a new baseline production target of 2.1 – 2.3 million ounces annually, the company said in a statement.

The cost of platinum rose by more than 2.79 per cent following the Amplats announcement, pushing the cost of an ounce of the precious metal ahead of the price of gold for the first time in over a year.

The company’s shares edged slightly up on the Johannesburg exchange.