Impala Platinum (Implats) has revealed its plans to lay off 13,000 employees following a strategic review of its operations at the Impala Rustenburg mine in South Africa which will also see closure of five shafts.
The layoffs as part of an R2.7bn ($200.1m) restructuring strategy will be executed over two years to reduce the number of 40,000 employees and contractors at the end of FY2018 to 27,000.
The South Africa-based platinum miner said that a considerable decline in the US$ platinum price along with sustained high mining cost inflation, has forced it to take up the restructuring plan.
It said further that cost pressure is especially acute in older, deeper, labor‐intensive conventional Platinum Group Metals (PGM) mines on the Western Limb of the Bushveld Complex.
The company’s review found out that optimization efforts alone were not going to be enough to secure economic viability of its operations in low-price environment.
Implats said that it needs to implement drastic restructuring steps to turn its existing operations into a sustainable future position.
With plans to move from 11 to six operating shafts, the miner is looking to cut down future production from 750,000 platinum ounces per annum to 520,000.
The shafts to be closed are nearing the end of their lives and have been uneconomic. Implats said that it will focus on profitable, lower‐cost, high‐value, and longer‐life assets in the future.
Implats CEO Nico Muller said: “Our recent strategic change initiatives, together with the implementation of the Impala Rustenburg transformation, positions the Group’s portfolio exceptionally well for future profitability, even at current metal prices.
“It will significantly improve the position of the Group to sustainably deliver improved returns to all stakeholders in the medium‐ to long‐term.”
In last September, Implats indicated that it may lay off around 2,500 employees at its Rustenburg mining operations owing to financial problems. It had warned that it may not stop at that number but could go further as part of a business optimization process to ensure continued sustainability of the mine.