Enacy Mapakame Business Reporter
The country’s biggest platinum producer, Zimplats Holdings Limited, has allayed fears of job losses at its Mhondoro–Ngezi operations after its parent company said it will slash jobs in its South African business.
Last week, Impala Platinum Holdings Limited, indicated plans to cut 13 000 jobs in a R2,7 billion restructuring of its Rustenburg operations.
Majority of platinum producers in South Africa have been unprofitable on the back of volatile global metal prices.
The Zimbabwe operations, whose jobs represent about 10 percent of the whole group’s workforce are safe.
Zimplats spokesperson Busi Chindove, told The Herald Business that the Zimbabwe operations were not part of the restructuring exercise that should see a number of shafts closed.
“The story to which you refer is specific to Impala Platinum and its operations in Rustenburg, South Africa. Zimplats is not included in this restructuring exercise,” she said in emailed responses.
The platinum giant has over 6 000 employees who are both permanent and contractors in Zimbabwe.
The Rustenburg two-year restructuring will reduce Impala Platinum shafts by five to only six by year 2021.
The outcomes of the restructuring will create a more focused Impala Rustenburg business centred around its best assets with higher quality long life ore bodies and lower operating costs and capital intensity.
This will also return the operation to profitability in a lower platinum price environment.
According to Businesslive, Impala’s other operations in Marula in Limpopo where it holds 73 percent, the Two Rivers joint venture in Mpumalanga and Zimbabwe’s Mimosa, which it shares with Sibanye-Stillwater — are also unaffected by the restructuring.
On announcing the restructuring, Implats chief executive Nico Muller, said restructuring was the only way to address loss making operations.
“The only option for conventional producers today is to fundamentally restructure loss-making operations to address cash burn and create lower cost, profitable businesses that are able to sustain operations and employment in a lower metal price environment.”
For the financial year-ended June 30, 2017, the Rustenburg brought in R14,6 billion in revenue, but was also responsible for a R9,86 billion loss while Zimplats has been profitable with a contribution to revenue and profit at R7 billion and R576 million respectively.
According to the Rustenburg strategic review, the operation has experienced continued losses driven by weak PGM prices, increasing operating costs and declining productivity.
Meanwhile, Zimplat’s profit for the quarter to June 30, 2018 jumped 23 percent to $37,1 million although revenue was 13 percent lower to $137 million compared to $158 million achieved in the previous quarter on depressed volumes.