Implats to cut 2 500 jobs
South Africa's second-largest platinum mining company has initiated a process that may lead to 2 500 staff reductions at its lossmaking Impala Rustenburg operation, where financial sustainability has deteriorated significantly in recent years.
The Johannesburg Stock Exchange-listed Impala Platinum (Implats) said on Monday that it had issued a notice to relevant employee representative groups, government authorities and other stakeholders of its initiation of a Section 189 consultation process in terms of the Labour Relations Act, aimed specifically at ensuring the sustainability of the Impala operations, which currently employ some 31 000 people.
The company, headed by CEO Nico Muller, is experiencing severe financial pressures largely as a result of persistently low metal prices in rands and continued production cost increases.
At the same time, Impala Rustenburg is encountering declining labour productivity rates, with production falling from an historical base of some 1 000 000 ounces of platinum a year to the 680 000 ounces to 720 000 ounces forecast for the current financial year ending 30 June next year.
“Unfortunately, we're now left with no further option in the prevailing operating environment but to consider further restructuring processes that may lead to a reduction in the number of employees,” Muller said in a release to Creamer Media's Mining Weekly Online.
While 2 500 jobs could be affected in the near term, further optimisation processes may also be required in future to ensure the continued sustainability of the operation.
“It must be emphasised that no final decision has been taken as regards the proposed restructuring, and no final decision will be taken prior to full and proper consultation with affected employees, and their representatives, in compliance with the Labour Relations Act,” added Muller, who told Mining Weekly Online that important steps to effect greater strength of leadership within the Impala Rustenburg operation had already been taken.
Implats reported last week that it was in the first phase of the review of an intended restructuring of Rustenburg after its headline earnings per share plunged to a 137c a share loss in the 12 months to 30 June. Ongoing cost saving and optimisation initiatives had been implemented in an attempt to restore profitability and secure continued employment as far as possible.
A priority target of returning Impala to a cash neutral position by 2019 has now been set assuming the current low platinum price environment remains as is.
This incorporates an assessment of each shaft and production area and will result in a mining complex that is likely to be somewhat different to the large and intricate current operation and may lead to the disposal or suspensions or harvesting of marginal and lossmaking shafts.
Impala's leadership has been strengthened and realigned to ensure that a fit for purpose team is in place to drive performance, to increase production volumes, and improve efficiencies and productivity.
On the cards is the rebuilding of the entire operating methodology and culture at Rustenburg, where delegation of authority and accountability to lower levels is anticipated.
Currently decision-making is seen as being excessively centralised, with the changes already undertaken giving rise to early signs of improvement.
MINING WEEKLY
The Johannesburg Stock Exchange-listed Impala Platinum (Implats) said on Monday that it had issued a notice to relevant employee representative groups, government authorities and other stakeholders of its initiation of a Section 189 consultation process in terms of the Labour Relations Act, aimed specifically at ensuring the sustainability of the Impala operations, which currently employ some 31 000 people.
The company, headed by CEO Nico Muller, is experiencing severe financial pressures largely as a result of persistently low metal prices in rands and continued production cost increases.
At the same time, Impala Rustenburg is encountering declining labour productivity rates, with production falling from an historical base of some 1 000 000 ounces of platinum a year to the 680 000 ounces to 720 000 ounces forecast for the current financial year ending 30 June next year.
“Unfortunately, we're now left with no further option in the prevailing operating environment but to consider further restructuring processes that may lead to a reduction in the number of employees,” Muller said in a release to Creamer Media's Mining Weekly Online.
While 2 500 jobs could be affected in the near term, further optimisation processes may also be required in future to ensure the continued sustainability of the operation.
“It must be emphasised that no final decision has been taken as regards the proposed restructuring, and no final decision will be taken prior to full and proper consultation with affected employees, and their representatives, in compliance with the Labour Relations Act,” added Muller, who told Mining Weekly Online that important steps to effect greater strength of leadership within the Impala Rustenburg operation had already been taken.
Implats reported last week that it was in the first phase of the review of an intended restructuring of Rustenburg after its headline earnings per share plunged to a 137c a share loss in the 12 months to 30 June. Ongoing cost saving and optimisation initiatives had been implemented in an attempt to restore profitability and secure continued employment as far as possible.
A priority target of returning Impala to a cash neutral position by 2019 has now been set assuming the current low platinum price environment remains as is.
This incorporates an assessment of each shaft and production area and will result in a mining complex that is likely to be somewhat different to the large and intricate current operation and may lead to the disposal or suspensions or harvesting of marginal and lossmaking shafts.
Impala's leadership has been strengthened and realigned to ensure that a fit for purpose team is in place to drive performance, to increase production volumes, and improve efficiencies and productivity.
On the cards is the rebuilding of the entire operating methodology and culture at Rustenburg, where delegation of authority and accountability to lower levels is anticipated.
Currently decision-making is seen as being excessively centralised, with the changes already undertaken giving rise to early signs of improvement.
MINING WEEKLY
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