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Strike-hit Amplats plans to cut 14,000 jobs in S.Africa

Top global platinum miner Anglo American Platinum warned on Tuesday it would axe 14,000 jobs in a dramatic restructuring of its strike-hit South African operations.

Months after being swept up in a deadly South African mining strike, Amplats said it planned to close four shafts and sell a mine considered unsustainable.

“As a result of the proposed changes to the business, a total of up to 14,000 jobs may be affected,” the firm said in a statement.

The vast majority of job cuts, 13,000 in all, would be lost around Rustenburg, a city 110 kilometres (70 miles) northwest of Johannesburg that was the crucible of labour unrest that shocked the world last August and September.

Then, mineworkers’ demands for higher wages crippled production across South Africa’s mining sector and resulted in violence that led to the deaths of at least 50 people amid a police crackdown.

The strikes reduced Amplats production by about 306,000 ounces.

In the end, the strikes may merely have been the last straw for Amplats, which like other operators in South Africa has struggled amid high extraction costs a lack of modernisation and steeper global competition.

Amplats said operations in South Africa have been unsustainable “for some time” because of high labour costs and low-quality ore.

“We are facing tough decisions to restore profitability to our operations,” said Amplats CEO Chris Griffith, while insisting that plans for restructuring pre-dated the strikes.

The restructuring would cost 3.2 billion rand ($366 million; 244 million euro) and result in a 400,000 ounce drop in platinum output, cutting total output by as much as a fifth.

A two-month consultation process with unions starts Tuesday, but initial shocked reactions appear to spell tough discussions ahead.

“We are really shocked,” said Lesiba Seshoka, spokesman for the main union, the National Union of Mineworkers (NUM). “It’s a disaster for the economy, it’s a disaster for all of us.”

He said: “We are appealing to all workers to come together in fighting these retrenchments and working together to safeguard existing jobs.”

Amplats vowed to try and replace jobs with new posts in “housing, infrastructure and small business development” in the regions that habitually send labourers to the mines, notably the impoverished Eastern Cape province.

The world’s number one platinum producer warned Monday that its 2012 earnings would probably show a loss of 491 to 628 cents per share, down from a profit of 1,365 cents per share in 2011.

A reassessment of the value of its assets resulted in a write-down of 463 million rand ($53 million), it said.

Harmony Gold announced earlier in January that it may shut its Kusasalethu mine in Carletonville near Johannesburg, potentially affecting 6,000 staff.