JOHANNESBURG (miningweekly.com) – Platinum producer Anglo American Platinum’s (Amplats’) wholly owned subsidiary Rustenburg Platinum Mines on Friday began a consultation process in terms of Sections 189 and 189A of the Labour Relations Act on the proposed restructuring of its Union mine joint venture, in the North West, and the Twickenham project, in Limpopo.

The company said it expected about 2 000 jobs in total to be affected by the proposed restructuring at Twickenham and Union.

“The final number will be determined after the consultation process. A number of retrenchment avoidance measures will be undertaken in an attempt to reduce the number of impacted individuals, including offers of voluntary severance packages, early retirement and opportunities for redeployment across the company,” said Amplats.

The company pointed out that the Section 189 process involved a 60-day consultation period with trade unions and affected employees facilitated by the Commission for Conciliation, Mediation and Arbitration. Only once that was concluded would the final number of affected jobs be known.

This restructuring process was in line with the company’s 2015 annual results announcement on February 8, in which Amplats stipulated that it would ensure it managed its business for the current commodity pricing environment. 

Amplats stated that, at Union mine, there had already been “significant restructuring efforts” to reduce overhead and operating costs and ensure the sustainability of the mine. 

During 2014, the Union north and south mines were consolidated into one mine, and in 2015 the Union south declines closed, reducing yearly production capacity by 80 oz to 140 oz.   
 
Amplats also reported that it had delayed all expansionary project decisions until at least 2017. As a result of this development, the Twickenham project was suspended in 2015 and the operation restructured to reduce cash losses, including placing one of its two shafts on care and maintenance and reducing the number of independent contractors. 

“However, the Twickenham project continued to make a substantial cash loss in 2015 and such losses cannot be sustained by the company,” Amplats commented. 
 
The company added that, despite these “considerable changes”, the economic outlook remained uncertain and further intervention was necessary to ensure a sustainable long-term outlook for Amplats and all its stakeholders. 

“Having considered a number of alternative options, we are proposing to undertake a further restructuring process at Union mine to ensure that the operation is both cash-positive and sustainable and have [therefore] resolved to place Twickenham on care and maintenance.” 
 
Moreover, the platinum producer stated that the proposed restructuring of Union was necessary regardless of whether or not a sale of the operation would take place.
 
“Amplats has no choice but to manage the business for the current environment and we need to take decisive action to ensure the sustainability of the business. Having considered all alternative options, it is with regret that the company finds itself in a position where further restructuring now needs to take place, which will impact a number of our employees,” said Amplats financial director Ian Botha.

“We will continue to engage with our key stakeholders and work together to find the best possible solutions for those who will ultimately be impacted,” he concluded.