Under seige Amplats axes 12,000 jobs

[miningmx.com] – AFTER more than a week threatening it would dismiss
workers, Anglo American Platinum (Amplats) has brought the axe down on the jobs of
12,000 workers at four of the five units of its Rustenburg operations.

Chris Griffith, the newly appointed CEO of Amplats, said the company was committed
to introducing centralised bargaining and to considering bringing wage negotiations
forward. But with strikes now spreading to its refining operations as well as the
Tumela (Union) and Dishaba (Amandelbult) mines, the company said it was unfeasible
to keep the Rustenberg mines open.

Three weeks into strike action, which has been typified by violence and acrimony,
most recently last night with the death of another worker, the company has lost
39,000 ounces of production, which was equal to R700m in revenue.

“Currently, four of the company’s mining operations in the Rustenburg area have
insufficient staff to operate and only essential services are being carried out at those
mines,’ Amplats said.

The four units contributed a combined 321,000 ounces of refined platinum production
in the group’s last financial year, about a quarter of total production.

Amplats’ Tumela shaft produced another 260,000 ounces of refined platinum in the
2011 financial year while Dishaba contributed 150,000 ounces to total group refined
platinum production of 1.5 million ounces. Both operations are in the Limpopo

Strike contagion had also spread to the Mortimer smelting operations while the
Rustenburg concentrators, smelters and refineries, and the Bathopele Mine continue to
operate normally, it said.

The four affected Rustenburg units are Khuseseleka, Thembelani, Khomanani and
Siphumelele. Disciplinary hearings of striking workers had been underway for a week,
during which time Amplats had repeatedly asked workers to return to work. Their
dismissals were conducted in absentia.

All eyes now fall on the security situation at Rustenburg, where water cannons and
other crowd containment measures were in full force last night.

“Anglo American Platinum continues to work with the local authorities and other
stakeholders to support the restoration of law and order to the affected areas,’ the
company said in its statement.

John Meyer, an analyst for UK stockbroker Fairfax, chose to look at the potential,
longer-term benefits of South Africa’s strike crisis: “Ironically, South African industry
may emerge better set from the strike action with closer ties between management
and workers,’ he said in a note to clients.

“The alternative for strike action and violent conflict to become an ongoing feature of
South African industry, is not acceptable for many western investors,’ he added.

Perhaps reflecting the potential benefits to offshore shareholders of the removal of
platinum from an over-supplied market, shares in Amplats were up a shade while
Anglo American had gained 2.2% on the JSE.

Earlier today, Kumba Iron Ore, which is 69% owned by Anglo American, said it had
engaged with about 300 illegally striking workers at its Sishen mine who had
demanded a R15,000 monthly salary increase to be paid to all workers. The striking
workers, all permanent employees, were not represented by any union, Kumba said.

“Kumba concluded a two-year wage agreement with organised labour two months ago
that makes provision for a salary increase of between 9 and 12%, which is well above
the rate of inflation,’ it said in an announcement.

It also paid R2.7bn to 6,209 members of its Envision bonus scheme last year equal to
a pretax payment of about R570,000 per employee.

Envision scheme members also receive dividends twice a year which amounted to
R33,675 (pre-tax) per member in 2012, Kumba said.