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JOHANNESBURG (miningweekly.com) – South Africa’s embattled platinum industry is at risk of losing 145 500 jobs by 2015, an analyst from Nomura said on Tuesday.
Assuming a breakeven platinum price of $1 500/oz for 2014 and 2015, Peter Attard-Montalto said in a report that about 24 000 jobs would be at risk next year, growing to 121 500 in 2015.
He stated that the number of job losses was linked to about 64-million ounces of production in 2014, or 14% of South Africa’s total supply, and about 277-million ounces, or 59% of the country’s output, the following year.
“We can therefore see that the necessity and effects of restructuring will spread widely beyond Amplats [Anglo American Platinum],” Attard-Montalto said in a statement, adding that the political clampdown on Amplats that banned restructuring job losses was only postponing the inevitable.
“Put simply, we do not believe that platinum mines will produce at a loss for more than two years…the jobs at risk could be shed after the election, when the mines will be under greater pain and the government will not be in the same place in the electoral cycle,” he put forward.
Amplats initially announced 14 000 job losses as part of a restructuring plan, which includes consolidating its Rustenburg operations into three mines and divesting of its loss-making Union mine, but later reduced the proposed job cuts to 6 000 after government threatened to revoke some of its licences.
Further, Nomura warned that other contributing factors that could amplify job losses in the domestic mining industry included the shift in support from the National Union of Mineworkers (NUM) to the Association of Mineworkers and Construction Union, with the deregistration of the NUM at Lonmin’s Marikana operation, outside Rustenburg, still to take place.
Nomura said a similar move would need to take place throughout the sector.
“We still find it difficult to see how the government has scope within current law to resist deregistration, but equally we see no way that the government will simply accept this consequence. As such we believe that current expectations about shifting labour regulations to shore up the position of NUM, especially through representation at collective bargaining and the representation limits associated with that, could well be altered,” Attard-Montalto pointed out.
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