Angloplats slashes jobs, shuts shafts

Allan Seccombe | Thu, 22 Oct 2009 10:25
[miningmx.com] -- ANGLO Platinum will tell the market in February 2010 about its plans to restructure its balance sheet as its lays off nearly 12,000 people and shut down production totalling 140,000 oz at three shafts.

Anglo Platinum, the world’s largest supplier of the metal, forecast capital expenditure of R9.7bn for financial 2009 and said in its September quarter production statement that its debt facilities of R32bn will cope with the group’s funding requirements. Full-year net debt is estimated at R21bn.

On 8 February, when Anglo Platinum releases its full year results, it will also tell the market about its balance re-structuring plan, said chief executive Neville Nicolau.

As part of a major restructuring of Anglo American, which holds 78% of the platinum company, Nicolau has been appointed as head of Anglo's platinum business unit, one of seven such units now housing the diversified group's core assets.

Anglo Platinum has retrenched 11,715 people by end-September, well ahead of the 10,000 head count reduction it had planned for the full year.

Another 724 jobs will be trimmed from the corporate centre, taking the head office to a staff level of just below 500.

"This remains large in comparison to major peers, but unquestionably represents a material step forward, in our view. We've always maintained that this megalithic structure had been a source of bureaucracy that almost certainly had a negative impact on the performance of the group’s underlying operations," JP Morgan's Steve Shepherd and Allan Cooke said in a note.

The labour reduction plan will cost R300m.

As part of its efforts to drive down costs and mine profitably, Anglo Platinum has now shut down three shafts that together produce 140,000 oz of equivalent refined platinum ounces. In August it shut down the Brakspruit and Boschfontein shafts after closing the Bleskop shaft in the second quarter.

"Under the leadership of CEO, Neville Nicolau, there has been a radical shift in the group’s approach. He has drawn a line under the relentless expansion of what we could only have described as the group's gratuitous costs structure," Shepherd and Cooke said.

Production in the quarter from mining and concentrate purchases slipped two percent to 616,500 oz quarter-on-quarter. Cash operating costs per refined ounce was R11,216 per ounce. There was no comparative figure.

The reduction in production stemmed from the shaft closures and fewer ounces from its pool-and-share agreements.