South African PGM producer Impala Platinum Holdings (Implats) has commenced Section 189 (3) consultations at its South African operations, indicating a significant number of potential job cuts.
The move is expected to impact around 3,900 jobs, representing a 9% reduction in labour across the group’s Impala Rustenburg, Impala Bafokeng and Marula operations, as well as the corporate office, which aims to cut head office costs by 30%.
The company has attributed the proposed redundancies to the ongoing weakness in PGM prices.
It emphasised that the restructuring is necessary to ensure that each business unit can sustainably and profitably contribute through the PGM cycle fluctuations, securing the long-term viability of the business.
In compliance with the Mineral and Petroleum Resources Development Act (MPRDA), the company also issued a notice to the Minerals and Mining Development Board and has engaged with the Minister of Minerals and Energy regarding the restructuring process.
The company noted that it has undertaken high-level engagements with its key stakeholders, maintaining its commitment to constructive collaboration and proactive communication.
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By GlobalData
The company stated that it is dedicated to conducting the restructuring in consultation with its social partners, while also honouring its socioeconomic commitments, and addressing the impacts on the livelihoods of those affected with respect and sensitivity.
Implats CEO Nico Muller said: “PGM pricing has declined sharply since the start of 2023, which together with persistent inflationary pressures on input costs has resulted in significant pressure on profitability and cash flow across the entire PGM sector, our operations included.
“Global macroeconomic uncertainty and rising geopolitical tensions present additional downside risks to industry sustainability. As a result of these pressures, the group has assessed and revised its business planning parameters and contemplated various measures to optimise 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 future job security for the entire workforce. Implats management therefore considers it necessary to commence the Section 189 (3) process.”
