ZIMPLATS‘ parent company, Implats is considering reducing its workforce by 3,900 to streamline operations and reduce costs.
Patricia Rwafa
As announced last week, Impala Platinum, a leading South African mining company and the world’s second-largest platinum producer announced plans for significant restructuring on Friday. This restructuring could impact up to 9% of their employees across various locations, including mines and corporate offices. The goal is to streamline operations and reduce costs, with a targeted 30% decrease in head office expenses, affecting approximately 3,900 positions.
According to Chief Executive Nico Muller,
“Platinum Group metal pricing has declined sharply since the start of 2023, which, together with persistent inflation pressures on input costs, has resulted in significant pressure on profitability and cash flow across the entire PGM sector, including our operations.
Global macroeconomic uncertainty and rising geopolitical tensions have further added to downside risks to industry sustainability. As a result of these pressures, the Group has assessed and revised its business planning parameters and completed various measures to optimize operational efficiencies and resources.
“Cost-saving, capital-deferment, and voluntary labour reduction initiatives to date have not sufficiently offset the impact of persistently lower prices. This has significantly undermined Implats’ financial position, which in turn threatens the future job security of the entire workforce.
It must be emphasized that Implats is committed to a fair and transparent environment, and no final decision will be taken prior to full and proper consultation with affected employees and their representatives, in compliance with the LRA. During the consultation process, all viable alternatives to job losses will be considered.”
The objective of Implats’ operational and expenditure response to prevailing PGM price weakness is to ensure each of its business units contributes sustainably and profitably through the fluctuations of PGM cycles, to ensure the long-term viability of the business and its significant commitments to its key stakeholders.
“Implats is facing a double whammy: plunging prices for platinum and other valuable metals they mine (PGMs), combined with rising costs across the board. This financial strain is threatening their profits and cash reserves.
Platinum prices have plummeted over the past 12 months, with futures down 17%. In early 2021, platinum futures peaked close to $1,300, compared with the current price of around $923.
The proposed streamlining follows a string of similar actions by South African peer Sibanye-Stillwater.
