Politics battles with business
Johannesburg – Arabstoday
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 $420m (3.8bn 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, which accounts for almost 40 percent of global platinum production, reported a more-than-140-percent drop in headline earnings in 2012.
Profits were obliterated by a higher wage bill and increased electricity costs. At the same time, expensive deeper mines yielded lower grade metals.
Amplats said most of the job cuts would 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.
"It is a spit in the face to the workers and the people of South Africa," said union umbrella group, COSATU.
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 is currently without a 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 been delayed rather than abandoned.
Most of Amplats job savings came from keeping open the Khuseleka 1 mine.
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.
Analysts said further job losses appeared likely, and may well have been delayed to avoid fuelling tensions ahead of next year's presidential elections.
"We will, in the long run, still end up with the same number of job losses as originally planned," said Peter Attard Montalto of Japanese bank Nomura.
"It may just be there is a need to wait for a different time politically to be able to take that additional step."
The timing is embarrassing for the government, coming as South Africa hosts 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 amid violence sparked by a turf war between the main National Union of Mineworkers (NUM) and a smaller upstart Association of Mineworkers and Construction Union (AMCU).
The decision is expected to 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.