By Lehlohonolo Lehana.
Anglo American Platinum (Amplats) announced on Monday, it has commenced a Section 189A process that is likely to result in the retrenchment of 3,700 employees across its platinum metals mining business.
The move comes amid a 35% decline in average platinum group metal prices last year which resulted in a 71% year-on-year fall in headline share earnings for the 12 months ended December to R53.30/share, announced today. Amplats’ full year results are lower than consensus of R60.15/share.
Amplats, owned 79% by Anglo American, said it had issued a Section 189 notice in terms of South Africa’s Labour Relations Act detailing a possible impact on 3,700 full time employees and 620 contractors across the group’s production base. The potential restructuring affects 17% of Amplats’ total 22,000 full time employees.
In December, Amplats announced plans to save R10bn this year including R5bn in operating costs. As part of this plan, the group guided to cash operating costs of R16,500 to R17,500 per PGM oz and all-in sustaining costs of $1,050/oz. This target compares to R17,859/PGM oz in 2023 cash operating costs, a 16% year-on-year decline.
“We responded rapidly throughout 2023 and are working hard to reposition the business to address both the global and local challenges that currently face the PGM industry,” said Craig Miller, CEO of Amplats. “It is clear to us, however, that the extensive range of actions we have already taken do not go far enough.”
The potential restructuring announced today by Amplats is in addition to those cost-saving measures and follows similar warnings by Impala Platinum and Sibanye-Stillwater.
Amplats announced a final 2023 dividend of R9.30 per share or R2.5bn. This brings the total dividend declared for 2023 to R21.30/share or R5.7bn, equivalent to a 40% pay-out of headline earnings, and compares to a payout of R115bn in the 2022 financial year.