The South African branch of Anglo American, known for its platinum production, plans to reduce its workforce by 3,700 as part of efforts to boost performance within the struggling division.
Amplats, also known as Anglo American Platinum, announced on Monday its intention to reduce its workforce due to a significant decline in platinum prices that resulted in a significant decrease in profits in the previous year.
Approximately 20% of the Johannesburg-based company’s employees are at risk of losing their jobs, as Amplats is also evaluating the positions of 620 contractors.
In 2023, Amplats, a company in which Anglo American has a 79% ownership, experienced a decrease in profits to R14 billion (£586 million). This is a 71% decrease from the previous year’s profits of R48.8 billion in 2022.
The company explained that the decline was a result of “economic uncertainty” and a 35% decrease in the price of platinum group metals.
The decline was caused by the decrease in worth of palladium and rhodium, crucial components utilized in the catalytic converters for gasoline and diesel automobiles. There has been a decrease in demand as more automakers increase their output of electric vehicles.
Amplats’ struggles will come as another headache for Anglo American, one of the biggest companies on London’s FTSE 100, which has lost billions of pounds off its value in recent months. Analysts suggested in December that the mining company had become a takeover target after its stocked dropped by 45% across 2023.
The CEO of Amplats, Craig Miller, stated that the company has introduced multiple cost-saving measures in response to both global and local difficulties. However, due to the prolonged low prices, additional actions are necessary.
On Thursday, Anglo American, the majority shareholder of De Beers, the leading diamond mining company globally, is expected to release its yearly earnings. Shareholders will be interested in observing any indications of a potential recovery.
Amplats plans to engage in discussions with both trade unions and non-unionized employees to determine the exact number of job reductions. The company has operations in various areas of northern South Africa.
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Miller stated that the company had made the difficult decision as a final option and recognized that the reduction in jobs would have a significant effect on employees, their loved ones, and the surrounding neighborhoods.
He stated that these measures are crucial in order to maintain employment for numerous workers and contractors. This will result in added value for our stakeholders, including salaries, taxes, and royalties, as well as the purchase of goods and services from local suppliers.
Source: theguardian.com
