Amplats yields to pressure, delays overhaul

Anglo American Platinum (Amplats), the platinum producer that last week announced it was firing 14,000 workers and selling off mines in South Africa, has agreed to a delay in the restructuring of its operations in the country.

The move, announced Tuesday in a joint statement with the Department of Mineral Resources and unions, comes after the company’s plans to mothball two mines triggered harsh criticism from the government and workers groups.

The world's top producer of platinum CEO, Chris Griffith, told Talk Radio 702 hat talks with the government had been "constructive."

"What we agreed on is we would delay the consultation process," he said.

The legally required consultation will now start on Jan. 30 instead of Jan. 15 and last for no more than 60 days, beginning tomorrow.

The dispute is politically charged, as Amplats’ parent company Anglo American (LON:AAL) is the main private-sector employer in South Africa, where unemployment is around 25%.

South Africa’s Minister of Mines, Susan Shabangu, has been quoted as saying that Amplats “betrayed government trust” by not consulting with it over the restructing plan. She also warned that Anglo’s entire portfolio would be subject to “regulatory scrutiny to ensure compliance to prescripts."

Amplats supplies 40% of the world’s platinum current demand. The closures announced last Tuesday would remove 400,000 oz. of its annual production, or a bit under 20% of its annual baseline production target, as well as a 7% from its overall global production.

South Africa’s mining unrest began when operators working for London-listed platinum Lonmin (LON:LMI) went on strike asking for higher wages in August. It escalated after police shot and killed 34 protesters near Lonmin’s mine complex in Marikana, and spread across the platinum and gold sectors.

(Image by BreakingNews)

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