Anglo American mulls job cuts in South Africa amid metal price declines and export bottlenecks

Anglo American Plc is contemplating job cuts at two South African units due to declining platinum-group metal prices and iron ore export bottlenecks, insiders revealed. Talks with the government have ensued, with officials urging a delay until post-elections in May..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Anglo Consults South Africa on Potential Platinum, Iron Job Cuts.By Antony Sguazzin, Loni Prinsloo and William Clowes.Anglo American Plc is considering cutting jobs at two units in South Africa because of declining platinum-group metal prices and bottlenecks curbing iron ore exports, four people familiar with the situation said. .___STEADY_PAYWALL___.The company has held talks with the government over the potential reduction in its workforce, the people said, asking not to be identified because the matter hasn't been made public. Senior government officials asked the company to consider delaying the cuts until after elections likely to take place around May, three of the people said. .The Congress of South African Trade Unions said that Anglo has also spoken to one of its members, the National Union of Mineworkers, about the matter. .The job cuts would be another blow to the electoral prospects of President Cyril Ramaphosa and his ruling African National Congress. Anglo is already in the midst of plans to slash corporate and head office jobs globally, with many of those positions in South Africa. The company joined other mining behemoths in posting a steep drop in first-half profit as China's economic slowdown damped earnings..Anglo American Platinum Ltd. — about 79% owned by London-based Anglo — is contending with a 14% fall in the price of platinum this year and a 41% plunge in palladium, a valuable byproduct. Rival Sibanye Stillwater Ltd. said in October that it may fire more than 4,000 platinum workers. .Kumba Iron Ore Ltd., owner of South Africa's biggest iron ore mine and a 70% subsidiary of Anglo, said third-quarter iron ore sales fell 12% from the year earlier, largely because of the poor performance of state ports and freight rail company, Transnet SOC Ltd. The company is almost out of storage space for the ore it has mined and can't rail it, one of the people said.."It is no secret that the current operating environment is very tough for both macro and South Africa-specific reasons and we are playing a major role in working across business and with government to help resolve some of those South Africa constraints," Anglo said in a response to queries. "Beyond that, it would be inappropriate for us to comment on the details of our discussions.".While a final decision on whether to fire workers and how many positions may be affected has not been taken, the job cuts may impact Anglo American Platinum first, the people familiar said. Those at Kumba may be deferred until later, they added. .The minerals department didn't respond to a request for comment, while Gwede Mantashe, minerals and energy minister and chairman of the ANC, didn't answer a call to his phone or respond to a text message. .PGM prices are falling because of global economic conditions, especially the weaker-than-expected recovery in China..Kumba's woes are directly related to the sub-standard performance of Transnet, whose inability to rail commodities to ports has also led to coal companies Seriti Resources Holdings Ltd. and Glencore Plc to start talks over job cuts. The plunge in rail performance has seen the amount of iron ore transported to ports fall to the lowest in a decade, while coal shipments by rail are at a 30-year low, according to a report prepared for Ramaphosa's office..In an Oct. 24 production report, Kumba said "ongoing rail and port challenges have increased our focus on cost optimization and initiatives to match production and optimize logistics capacity." It said it had 9 million tons of iron ore in stock at the end of September, almost double the amount it had on site a year earlier. .Read also:.Nedbank hires Jason Quinn from Absa as new CEO🔒 From the FT: SA urged to use forex reserves to tackle growing debt burden🔒 From the FT: Anglo American's high-stakes bet on polyhalite fertiliser – A new way to feed the world.© 2023 Bloomberg L.P.

Anglo American mulls job cuts in South Africa amid metal price declines and export bottlenecks

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