JOHANNESBURG (miningweekly.com) – Following weeks-long bilateral consultations with the Department of Mineral Resources (DMR) over its contentious restructuring plan, Anglo American Platinum (Amplats) on Friday announced its revised business proposal, which will see the original 14 000 estimated job cuts reduced to some 6 000.

The  review of the company’s business, announced in January, was in response to downwardly revised expectations for platinum demand growth and several structural changes that had eroded profitability in recent years.

The revised proposals, announced on Friday, would include curtailing baseline production to between 2.2-million ounces and 2.4-million ounces a year in the short to medium term, most significantly through the “consolidation” of the Rustenburg operations into three operating mines and the divestment of its loss-making Union mine.

These measures were intended to deliver savings of R3.8-billion a year by 2015.

CEO Chris Griffith, however, hastened to add that these would remain proposals until the miner had engaged with unions, with talks expected to last for up to three months.

“This is not a fait accompli for labour. Now we begin the process of engaging with the representative unions to receive their deserved input. There is certainly no need for industrial action,” he said, explaining that labour had only been privy to the restructuring consultation at its early stages, before it had matured into “robust” and “constructive” bilateral discussions between Amplats and the DMR.

Despite reports that members of trade union, the Association of Mineworkers and Construction Union (AMCU), had vowed to launch protest strikes against any proposal by the company to cut jobs, even if this fell short of the initial 14 000 target, AMCU president Joseph Mathunjwa said on Thursday that there remained a due process, and, thus,the union would not pre-empt a decision.

“Any possible objection we have to the outcome will be dealt with within the confines of the Labour Relations Act. We do not condone violence,” he told Mining Weekly on Thursday.

Griffith said, on Friday, that AMCU held some 41% representation across its operations, with rival union, the National Union of Mineworkers, representing 35% of all workers.

Should the proposed restructuring go ahead, the existing Rustenburg mines would be consolidated into three operating mines through the integration and optimisation of the Khuseleka 2 shaft and the Khomanani 1 and 2 shafts into the surrounding mines.

In the chief revision to the original proposal, the Khuseleka 1 shaft would remain operational.

This would result in a contraction of production capacity of about 250 000 oz/y in 2013 and an additional 100 000 oz/y in the medium term, reconfiguring the Rustenburg operations as a producer of between 320 000 oz/y and 350 000 oz/y of platinum in the medium term.

The company’s original plans to divest its unprofitable Union mines “at the right time” remained intact.

In the interim, it proposed that Union be reconfigured to protect near-term value, by ceasing mining activities at the Union North declines, combining the Union North and South shafts into one operation and putting the Mortimer Merensky concentrator on long-term care and maintenance.

The restructuring of joint venture operations was also reviewed to optimise long-term profitability and competitiveness, which may include rationalisation of farm boundaries to optimise life-of-mine extensions and other commercial considerations.

The company’s review of its overheads, support structure and costs, as well as the review of its commercial and marketing strategy would also proceed as planned.  

Processing operations would be aligned to the revised long-term production plans. 

Griffith said the revised proposals reflected Amplats’ commitment to South Africa, and its role in tackling the socioeconomic challenges facing the country, while recognising that the company needed to take action to return the platinum miner to profitability. 

“We are hopeful that the revised proposals will serve as a basis for meaningful consultation with our employees and their representative structures. The revised portfolio is one that retains flexibility, reduces complexity and will position us to achieve our goal of creating a sustainable and profitable platinum business,” he commented.