Anglo American Platinum Ltd, the biggest producer of the metal, said that it might slash as many as 6,000 jobs at it South African mines, reducing an earlier plan that might have resulted in 14,000 losses.
The new proposals would end up idling of three shafts in the Rustenburg region rather than four originally, with production capacity cut of much as 350,000 ounces, less than the 400,000 ounces first announced, according to the Johannesburg-based unit of Anglo American Plc (AAL). The plans would now be taken to unions, chief executive officer Chris Griffith said.
In January, Anglo American Platinum, known as Amplats, put its plans on hold for talks following criticism from the government over its handling of the matter and threatened to revoke some mining licenses.
Producers in South Africa have struggled with higher costs as strikes led to above-inflation wage gains, while demand waned. Amplats had intended a cut of 7 per cent in global output to help return to profitability.
Griffith said on a conference call, that these had to be proposals as one went into the consultation process. He added, what they could not be was deciding this was a fait accompli and employee representatives and stakeholder representatives had no opportunity in influencing that.
According to Griffith, the cost of the reorganisation was expected to be 2.3 billion rand, less than the 3.2 billion rand initially announced. According to the company's annual report, the company had 56,379 employees by the end of December.
Under the new plan output would be cut by 250,000 ounces in 2013 and an additional 100,000 ounces annually in the ''medium term,'' the company said.
Meanwhile, activists with the militant Association of Mineworkers and Construction Union (AMCU) said job losses would be resisted.
Reuters quoted, Simon Hlongwane, a winch operator and AMCU branch secretary at Amplats Thembelani mine, as saying even if it was 5,000 or 6,000 jobs, they must not be lost. He asked where 6,000 people in the economy would go. He added, they would engage in criminality.
Social tensions are running high after rivalry between AMCU and the dominant National Union of Mineworkers (NUM) took a violent turn last year leading to the killing of 50 people which triggered illegal strikes hitting production. This was a major reason for Amplats suffering its first loss last year.
With unemployment over 25 per cent and elections to be held next year, the government has had to take a firm approach to the negotiations with Amplats, which has promised an announcement this week.
The average South African mineworker has eight dependants and the social and political consequences even of reduced lay-offs could be reaching, according to analysts.