3,700 jobs cut in one of South Africa’s most important sectors

Anglo American Platinum (Amplats) has finalised its retrenchment process, with roughly 3,700 jobs affected.

In its interim results for the first six months of 2024, the group said that its restructuring process in Section 189A of the Labour Relations Act, 66 of 1995, has been completed, with the most significant impact being at Amandelbult in Limpopo.

Of the 3,700 jobs affected (including permanent and fixed-term positions) across its South African operations, roughly 75% had exited the company by the end of June 2024, with the remaining 25% expected to leave in the second half of the year.

Amplats proposed the restructuring at the start of the year as platinum group metals (PGMS) plummeting prices led to major profit squeezes.

Only two years prior, PGM miners declared bumper earnings as automakers’ demand pushed the price of rhodium and palladium – which are used to curb emissions from gasoline and diesel vehicles – to record levels. 

Amplats profit dropped from R49.2 billion in 2022 to R13 billion in 2023.

Amidst these retrenchments, the group’s underlying financials still dipped downwards.

Basic earnings per share and heading earnings per share dropped 18% to 24.02 cents and 24.56 cents, respectively.

Despite the massive job losses, the group declared an interim dividend of R2.6 billion (R9.75 per share), a roughly 40% payout of headline earnings.

“Our previously announced Action Plan encompassing decisive measures to improve our operational excellence and sustainability, is progressing well and enabled a robust performance in the first half of the year, barring the tragic fatalities at Amandelbult,” said CEO Craig Miller.

“Looking ahead, we are optimistic about the long-term outlook for the PGMs we produce, which play an important role in creating a greener world, including their many actual and potential prospects for growth in applications from fuel cells and battery technology to medical technologies.”

Notably, other PGM miners have also introduced major job cuts across the country.

Sibanye Stillwater has cut 11,000 jobs from its workforce in the last year and a half.

Sibanye CEO Neal Froneman said the company’s restructuring needs to “align with the reduced operating footprint following the necessary operational restructuring for greater regional sustainability and profitability.”

In April, Impala Platinum Holdings Limited (Implats) also initiated a S189 restructuring process, with 3,900 jobs on the line at its office and Impala Rustenburg, Impala Bafokeng and Marula operations.

“PGM pricing has declined sharply since the start of 2023, which together with persistent inflationary pressures on input costs has resulted in significant pressure on profitability and cashflow across the entire PGM sector, our operations included,” said Nico Muller, Implats CEO.

Implats already cut 1,000 jobs in the second half of 2023.

As a massive employer and tax contributor, mining is essential to South Africa’s economy.

The sector employs roughly 450,000 people and pays R140 billion in tax and royalties annually.

That said, the Reserve Bank said that activity in the mining sector continues to be suppressed due to the following issues:

• High operating costs;

• A difficult policy environment;

• Inefficient rail and port infrastructure;

• Lower commodity prices (which are cyclical and are largely determined by events outside the country’s control);

• Electricity-supply disruptions.

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