The platinum arm of Anglo American is to cut 3,700 jobs in South Africa as the British mining company attempts to improve performance in the troubled division.
Anglo American Platinum (Amplats) said on Monday it aimed to cut jobs after a sharp drop in platinum metal prices, which had led to a collapse in profits last year.
The jobs under threat account for about one-fifth of the Johannesburg-based company’s total workforce, with Amplats also reviewing the roles of an additional 620 contractors.
Profits at Amplats, in which Anglo American holds a 79% stake, fell to R14bn (£586m) in 2023, down by 71% from R48.8bn in 2022.
The business attributed the fall to “macroeconomic uncertainty”, as well as a 35% fall in price of platinum group metals.
The fall was driven by the drop in value of palladium and rhodium, important materials used in the catalytic converters for petrol and diesel cars. Demand has taken a hit as more carmakers ramp up production of electric vehicles.
Amplats’ struggles will come as another headache for Anglo American, one of the biggest companies on London’s FTSE 100, which has lost billions of pounds off its value in recent months. Analysts suggested in December that the mining company had become a takeover target after its stocked dropped by 45% across 2023.
Craig Miller, the chief executive of Amplats, said the company had implemented several cost-cutting initiatives to address the global and local challenges but the “protracted low-price initiative” meant further measures were needed.
Anglo American, which is also the main shareholder in De Beers, the world’s largest diamond miner, is scheduled to report its annual results on Thursday. Investors will be keen to see any signs of a turnaround.
Amplats will begin a consultation period with trade unions and non-unionised staff, with the final number of job cuts coming after this period. The company has operations across northern South Africa.
Miller said the decision had been taken as a “last resort” for the company and it acknowledged that the job cuts would have a “socioeconomic impact” on workers, their families and local communities.
He said: “These actions are necessary to continue the employ of thousands of workers and contractors who will continue to add value for our stakeholders – through salaries, taxes and royalties, as well as procurement of goods and services from local suppliers.”
