Anglo American Platinum (Amplats), the world's largest producer of the metal, had to be restructured to make it viable for the future, outgoing Anglo American chief executive Cynthia Carroll said on Tuesday (5 February).
She told delegates at the Mining Indaba
in Cape Town that platinum sector was in crisis and facing enormous economic challenges.
On Monday (4 February), Amplats reported a headline loss of R1.47bn for 2012, a fall of 141% from the previous year. It also announced it would not be paying a dividend.
The loss has been attributed, among other things, to the unprotected wage strikes that rocked the company's mines last year.
Amplats announced plans to retrench 14,000 workers, but recently postponed these plans in order to hold talks with government and labour representatives.
Referring to "government and political parties" as partners, Carroll said a "defining context for the relationship between Anglo American and its partners in the months ahead will clearly be the consultation process in relation to our platinum restructuring proposals".
While a conference platform was not the place to conduct such consultation, she wished to "make the position clear" on a topic that had attracted so much media coverage.
"The critical starting point is that the boards of Anglo American and Anglo American Platinum are totally committed to ensuring a sustainable platinum business for the future -- for the benefit of all stakeholders."
She said it was a business in which Anglo planned to invest R100bn over the next decade.
"But to do that we must make changes that keep the business sustainable. We need to recognise and tackle the enormous economic challenges the platinum sector faces. This is an industry in crisis."
She emphasised that demand for platinum had dropped and there was no sign of respite in the near-term. At the same time, labour, energy costs and other input costs had risen relentlessly.
"As a result, margins have been squeezed dramatically and the sector has not been earning adequate returns. This is an unsustainable position. So Anglo American Platinum, had to restructure the business to make it viable for the future and -- in doing so -- to protect over 45,000 jobs," she said
The question of how to restructure was one that required consultation with all stakeholders.
"We have made our proposals public -- as we are required to do as a listed company. We are targeting to create at least as many jobs as the 14,000 that may be affected by the restructuring. And that is on top of a target to re-deploy nine thousand of the employees who may be affected," she said.
Carroll said Anglo was "totally serious" in its intent to create jobs.
"We will provide high-quality training, as soon as it is needed, to enable employees to benefit from any re-deployment or from new job opportunities we will create."
She said restructuring was always painful and difficult.
"We value the opportunity to engage with our partners. Over the next 60 days, we will work collaboratively with the department of mineral resources and the trade unions to explore the way forward. After that, the formal Section 189 consultation will resume for the following 60 days.
"In addition, we will continue to be active participants in the MIGDETT [the mining growth, development and employment task team] discussions about the challenges facing the platinum sector as a whole.
"These are all important processes, which we are approaching with good faith and with serious intent," Carroll said.
via I-Net Bridge