Amplats to cut 7,000 South African jobs, union ‘shocked’ – by Sherilee Lakmidas and Ed Stoddard (Reuters U.S. – August 19, 2013)

http://www.reuters.com/ 

JOHANNESBURG – (Reuters) – Anglo American Platinum (Amplats) said it planned almost 7,000 job cuts at its South African operations including thousands of compulsory lay-offs, drawing an angry response from a labor union and raising the risk of renewed unrest at its mines.

Amplats (AMSJ.J), the world’s top platinum producer and a unit of Anglo American (AAL.L), had aimed for 14,000 job cuts after posting its first loss last year, but lowered the target after a backlash from the government and the unions, which organized a series of strikes.

After months of consultations with government officials and worker representatives, the company said 6,000 mining jobs would go and that “approximately 900 corporate and overhead employees will also be affected”.

The addition of white-collar job cuts might alleviate some criticism of the lay-off plan, since not only blue-collar workers would be affected. But at least one union saw the decision by Amplats as a betrayal, saying the company had committed only last week to avoiding forced lay-offs.

“We are shocked. Our agreement with Amplats was to cut 3,000 jobs and those jobs would not be forced retrenchments but voluntary severance packages. This agreement was reached a week ago,” said National Union of Mineworkers spokesman Lesiba Seshoka.

A source familiar with the talks said about a third of the 6,000 cuts would be made via voluntary redundancy, retirement and redeployment. That means around 4,000 are likely to be laid off.

The job cuts will lower production and may lend support to prices of platinum, used in emissions-capping catalytic converters in automobiles. The white metal’s price has been depressed by poor global demand.

“We are at a critical stage of the process and this restructuring will be a crucial step to enable us to return to profitability,” said Amplats Chief Executive Chris Griffith.

A month’s notice period for the targeted employees will commence on September 1, said Griffith.

Amplats has a high rate of employee turnover in its South African mines and the company may shed some jobs by not replacing departing miners.

The issue of mining jobs is sensitive in South Africa ahead of elections next year and comes as companies and unions lock horns in the toughest ever talks over wages.

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