[miningmx.com] – ROYAL Bafokeng Platinum (RBPlat) said it had
accelerated discussions with labour and staff regarding a possible cutback in its
workforce owing to “difficult” operating conditions.
“In line with our stated ongoing strategy to achieve operational excellence and also
in response to difficult industry operating conditions, RBPlat has accelerated its
process of cost review, which includes labour rationalisation, in consultation with
staff and representative unions,” the company said in a statement to the JSE.
It was commenting in notes to its interim results ended June in which RBPlat, which
is 12.6% owned by Anglo American Platinum (Amplats), posted share earnings of 43
cents compared to 105 cents in the comparable period of 2011; a 59% decline.
During the period, RBPlat increased cash and near-cash reserves to R1.18bn from
R1.1bn as of January 1.
Despite the improvement in the cash balance, the market conditions that have seen
the platinum price fall to $1,400 per ounce, compared to an average of $1,790/oz in
the first half of the 2011 financial year, have hit home. The basket price RBPlat
received in the first half fell 4.6% to R15,638/oz. Safety-related stoppages also
affected production, which lowered revenue.
Capital at the R11.8bn Styldrift project, an expansion slated to double the company’s
platinum production to 600,000 oz/year, was cut back by R124m. Some R1.3bn
would be spent on the Styldrift project this year.
In February RBPlat said it would defer R462.4m in capital spending, comprising
exploration drilling at the Bafokeng Rasimone Platinum Mine (BRPM) and Styldrift II
North shaft (R71.1m); construction of a chairlift at BRPM’s South shaft (R90.7m)
and R300m in BRPM concentrator facility upgrades.
Speaking at the company’s interim-results presentation, RBPlat CEO, Steve Phiri,
said the company was going through a belt-tightening process. “We are saving on
costs wherever we can,” he said. Labour costs accounted for 60% of all mining costs.
“Only the low-cost producers can survive the downturn … or go belly-up last,” he
said. The labour rationalisation strategy was started in 2011 and would be complete
at year end. Phiri was unable to forecast the quantum of the labour cutback, and
added: “The outcome will be a jointly agreed one”.
South Africa’s platinum industry has been shrivened lately with a number of
companies cutting back on expansion projects, such as Eastern Platinum, while
Aquarius Platinum has mothballed two of its mines. Amplats is nearing the end of an
operational review in which it is likely to mothball, sell or shut high-cost mines.
However, RBPlats said it was unlikely to tap the market for funds for Styldrift before
the 2014 financial year. The company’s share of Styldrift capital is R7.9bn, equal to
its 67% stake. The balance of the project is owned by Amplats.
