JOHANNESBURG, Jan 28 (Reuters) – Platinum producer Lonmin will continue to review its services and reduce costs, mainly through cutting jobs, as the slide in the price of its main commodity bites further.
The company said labour costs fell 194 million rand ($11.8 million) in the last three months of 2015 after it shed 5,077 jobs, or 84.6 percent of its planned reduction in head count.
“Progress continues with the restructuring programme due to the new benchmarked operating model and removal of high cost production to ensure the business remains viable,” Lonmin said in a statement.
It is targeting savings of 700 million rand in 2016.
Read also:Â Wage hikes, falling commodity prices point towards jobs bloodbath
Lonmin, crippled by a record 2014 strike, rising costs and a plunging platinum price, raised $400 million through a cash call in December which failed to find favour with shareholders and priced shares at about a penny each.
The miner said refined platinum production reached 171,441 ounces in the three months to the end of December, an increase of 22.6 percent from a year ago despite higher safety stoppages.
The price of platinum has been on the decline for roughly the past five years. It fell 26 percent last year and is less than half its 2011 peak.
Read also: More job losses in platinum as Lonmin peers in crystal ballÂ
South Africa’s Kumba Iron Ore to cut jobs and downsize flagship mine
JOHANNESBURG, Jan 28 (Reuters) – South Africa’s Kumba Iron Ore on Thursday said it would scale back operations, cut costs and planned to reduce jobs at its Sishen mine, the largest iron ore operation in Africa, sending its shares 5 percent higher.
Sharp declines in iron ore prices due to oversupply and a slowing economic growth in China, the world’s biggest metals consumer have hit companies like Kumba a subsdiary of global mining company Anglo American hard.
Read also:Â Anglo to slash another 13% off its book value after R100bn iron ore folly
The restructuring would impact 2,633 permanent employees and 1,300 contractors, Kumba said in a statement.
“This has been an extremely difficult decision but, after exhausting all other avenues and doing all we could have done to reduce costs, we have no choice but to take more significant steps to preserve the viability of the mine,” Kumba’s Chief Executive Officer, Norman Mbazima said.
Last week the National Union of Mineworkers (NUM) said it was bracing itself for job cuts at Sishen as the company was in “dire straights”.
Read also:Â Pain for Kumba? World Bank sees sub-$50 iron ore price to 2020 as glut builds
Job cuts are a sensitive topic in South Africa, where over a quarter of the population is unemployed and coupled with rising food prices could hurt the ruling African National Congress in the local government elections later this year.
Shares in the company jumped more than 5 percent when the market opened and later traded up 5.30 percent at 33.87 rand by 0735 GMT, outpacing the All-Share index.
South Africa Sees 32,000 Possible Mining Job Cuts, Minister Says
By Kevin Crowley
(Bloomberg) — Mining companies in South Africa, the world’s biggest platinum and manganese producer, have informed the nation’s mines ministry of intentions to cut about 32,000 jobs as prices decline, Mineral Resources Minister Mosebenzi Zwane said.
“Commodity prices have fallen for quite some time and that is causing problems in term of jobs and restructuring,” he told reporters Thursday in the capital, Pretoria. “We are engaging with companies to try and see how best we can deal with that situation in a responsible way.”
Anglo American Plc’s Kumba Iron Ore unit is the latest producer to announce potential job cuts, saying it plans to reduce its staff and contractors by about 3,900 after prices for the steelmaking ingredient dropped almost 40 percent last year. Plunging commodity prices are adding to pressure on an industry struggling with regulatory changes and unreliable power supplies, and some of the country’s biggest mining companies are threatening to cut jobs.
Mitigation Efforts
Mining accounts for more than half of the nation’s exports and employs about 440,000 people, a critical source of jobs in a nation with a 25 percent unemployment rate.
The department will seek to mitigate job cuts by transferring workers to other mines, re-skilling employees and asking companies if they can cut costs in other ways, Zwane said.
“Where there are job losses, we’ll put in mechanisms to deal with that situation,” he said. “We’re going to do everything possible in our power to try and control the situation until the price of commodities improves.”
Section 52 of the country’s mineral resources law obliges companies to inform the minister if 10 percent of a workforce or more than 500 people are likely to lose their jobs in a year.
