11 May 2013

6000 mine jobs to be cut

7:34 am on 11 May 2013

Anglo American Platinum plans to cut 6000 jobs at its mines in South Africa, which were hit by labour unrest last year.

Chief executive Chris Griffith said the layoffs would save the company 2.3 billion rand (£160 million) in costs.

As a result, platinum production will fall by 250,000 ounces this year and by 100,000 ounces a year in the future.

The company reported its first loss last year following the disruption caused by strike action.

Amplats is 80%-owned by Anglo American, a minerals conglomerate.

The BBC reports most of the layoffs will affect the city of Rustenburg, but the figure of 6000 jobs is significantly fewer than an earlier proposal in January to shed 14,000 jobs.

Production at the Rustenburg mine was disrupted for eight weeks in 2012 by illegal strikes. At the time, Amplats said that the strikes had cost it 700 million rand (£50 million) in revenue.

In January, Amplats announced a restructuring plan that would cut 14,000 jobs and save 3.8 billion rand ($US420 million) per year.

A month later the company reported an operating loss of 6.33 billion rand for the 2012 financial year 2012, with output down 8% to 2.2 million ounces. In 2011, it reported a profit of 7.97 billion rand.

Strikes in the platinum and gold industry claimed more than 50 lives last year, including 34 strikers at a platinum mine run by Lonmin.