Anglo American subsidiary Anglo American Platinum, known as Amplats, has announced it will mothball its two least profitable South African platinum mines, sell another and cut 14,000 jobs, the Wall Street Journal reported.
The job cuts amount to a loss of three percent of South Africa's mine labor force, Reuters reported.
Amplats CEO Chris Griffith told reporters that trimming costs and cutting annual output by about one-fifth is necessary “to save the business,” Reuters reported.
"We must evolve to align the business with our expectations of the platinum market's long-term dynamics and address the structural changes that have eroded profitability over time," he said, according to Reuters.
Increasing wages and electricity costs, along with sluggish demand for platinum, have depressed profits, the Wall Street Journal reported.
South African officials swiftly condemned the proposals, Reuters reported. An Amplats labor leader said miners might strike in protest, raising fears that South Africa could see a repeat of the violence that accompanied last year’s wildcat miner strikes that left 50 dead.
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South Africa's mines minister Susan Shabangu told reporters at a press conference in Pretoria today that the government was surprised and shocked by the move, South African newspaper the Mail & Guardian reported.
"It is regrettable that the company consulted with [my] department less than seven days ago, despite the major socioeconomic ramifications of its decision," she said, according to the Mail & Guardian.
"They've come up with their own plan, finalized their plan and told us," Shabangu added, according to Reuters.