Amplats axes 6000 jobs in South Africa

Top global platinum producer Anglo American Platinum on Friday unveiled revised plans to cut 6,000 jobs at its South African operations, risking renewed labour unrest. Amid fierce government and union pressure, the company backed away from initial proposals to cut up to 14,000 jobs but unveiled cost savings worth $420 million (3.8 billion rand) a year. "(The) principle issue is to turn our loss-making operations to profitability," said Amplats CEO Chris Griffith, denying he had put politics before business principles. Amplats reported a more-than-140 percent drop headline earnings in 2012. Profits were obliterated thanks to a higher wage bill and increased electricity costs, at the same time as expensive deeper mines yielded lower grade metals. Amplats said most of the job cuts will come in the northern city of Rustenburg, a crucible of deadly labour violence last year. Unions have vowed to fight any job cuts and fresh work stoppages are likely. After reacting furiously to Amplats initial shock announcement, the South African government welcomed Friday's revision as "quite an achievement." "If government and business and labour sit down together, you can find better solutions," said finance minister Pravin Gordhan. "Hopefully government and business can still work together to see how we look after those 6,000 people and ensure that there is a clear social plan to support them." Friday's announcement of vastly reduced job losses will offer little succour to workers struggling with crippling unemployment. At least one in four South African workers currently has no job and growth is anaemic compared to the rest of Africa, which is expected to grow at more than five percent this year. And larger retrenchments are likely to have be delayed rather than abandoned. Most of Amplats job savings came from keeping the Khuseleka 1 mine open. Griffith suggested the facility, which currently employs around 4,500 people, will be closed within three to five years anyway, although some jobs may be shifted elsewhere. The timing is embarrassing for the government, coming as South Africa holds the World Economic Forum's "African Davos" in Cape Town. South Africa's mining sector has been reeling since last August when 34 people were killed in one day at the nearby Lonmin platinum mine. Since then mines in the region have been hit by a series of wildcat strikes, go slows and clashes between established and more militant up-and-coming unions. At Amplats five mine workers were shot in February by guards sparked by a turf war between the main National Union of Mineworker (NUM) and a smaller upstart Association of Mineworkers and Construction Union (AMCU). It is expected that Amplats decision will cut production capacity by 250,000 ounces this year, around 11 percent of last year's total production. On the Johannesburg Stock Exchange Amplats shares were down 2.4 percent, while the rand fell slightly against the dollar. Amplats also has operations in Zimbabwe and Brazil. Its parent company Anglo American is one of the world's largest mining companies.