The platinum miner hopes to extract R3.8bn in cost savings and create 14,000 new jobs through the plan.
GRONINGEN (MINEWEB) – Anglo American Platinum said Tuesday it will, among other things, reconfigure its Rustenburg operations into three mines, sell its Union mine and deliver R3.8bn in cost savings by 2015.
These plans are all the result of a review of its operations undertaken by its parent Anglo American in a bid to return the company to long-term profitability and are expected to affect as many as 14,000 jobs, 13,000 of which will be in the Rustenburg area.
According to a release out on Tuesday morning, the group said, it would restructure its Rustenburg operations into a sustainable 320-350,000oz platinum producer across three operating mines.
As a result, “Four unsustainable, high-cost shafts, namely Khuseleka 1 and 2 and Khomanani 1 and 2, will be put on long-term care and maintenance.” This it says will see the production profile reduced by approximately 400,000oz per annum with a baseline production target of 2.1 – 2.3 million oz per annum.
The group said, this may also impact the Rustenburg processing operations which could include the closure of the Waterval UG2 Concentrator and No. 2 Smelting Furnace.
The second major change, Anglo American Platinum has planned is the divestiture of its Union mine, “at the right time”.
The group says, the Union Mines “are likely to be of greater value under different ownership, particularly in comparison to the other attractive growth options in the Company’s portfolio, and it therefore proposes to divest Union at the right time.
Until, a buyer has been found, the group says, it will halt “mining activities at the Union North Declines, combining Union North and South Shafts into one operation and putting the Mortimer Merensky concentrator on long-term care and maintenance.
The proposed plan, which CEO, Chris Griffith was at pains to point out was the result of a studied review, not just of Anglo American Platinum but of the sector as a whole, rather than a knee-jerk reaction to the strikes seen toward the end of last year, is expected to cost the group around R3.2bn in 2013.
Of this figure, potential retrenchment costs account for up to R1.2bn, while the social mitigation costs associated with the retrenchments would be R470m.
The ongoing care and maintenance of the shafts that are being shut is to cost approximately R100 million per year beyond 2013 and, the group anticipates the potential for further social mitigation cost of R400 million post-2013.
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