Anglo American cuts jobs in South Africa

Anglo American has begun cutting jobs at its head office in South Africa, following reports of other mining giants issuing retrenchment notices as Transnet’s deteriorating performance weighs on their operations.

The focus will be on corporate positions after the company earlier this year split its business into two regional divisions, one covering the Americas and Africa and the other Australia.

Anglo, one of the world’s biggest miners, started 60-day negotiations with workers in South Africa on Wednesday, a labour law requirement.

The National Union of Mineworkers (NUM) said that 181 notices were sent to Anglo American’s Kumba Iron Ore unit staff warning they could lose their jobs.

Talks started Wednesday, and after a 60-day process, 141 jobs are expected to be lost, Livhuwani Mammburu, the NUM spokesman, told Bloomberg. 

An Anglo American spokesman confirmed that the notices had been sent out in South Africa, stressing that it is a global process.

Anglo American’s job cuts follow those of fellow global mining giant Glencore, which launched a retrenchment process last month at one of its coal operations due to an inability to transport coal for export and declining coal prices.

Global commodity trading giant Glencore has begun a retrenchment process at its iMpunzi coal complex in Mpumalanga, which has 1,138 permanent employees.

New24 reported that the general manager of iMpunzi, Hlayiseka Chauke, said Transnet Freight Rail’s poor performance was the primary consideration behind the retrenchment process.

Transnet’s performance has been poor since the beginning of 2021, with export volumes railed to the Richards Bay Coal Terminal dropping from as high as 80 million tonnes to about 50 million tonnes in 2022.

In response, many miners chose to truck coal to Maputo, Durban, and Richards Bay. However, this has become unsustainable following a decrease in the price of coal to an average of $100 per ton in 2023 from $200 per ton in 2022.

“This directly impacts iMpunzi Complex in that there are insufficient trains available to move all the export product to the port, and trucking has become economically unsustainable due to lower prices,” Chauke said.

iMpunzi has an annual capacity of 10.3 million tonnes but can only transport 6 million tonnes via rail for export. Chauke said this is unsustainable.

Glencore’s job cuts come after fellow coal miner Seriti Power issued a Section 189 retrenchment process at its Klipspruit colliery, affecting 605 workers.

Seriti lamented its inability to transport coal by rail to South African ports for export, hampering the production at its mines.

“Stockpiles at our export mines remain high while stockpiles at Richards Bay Coal Terminal remain low due to persistently low export coal railings to port,” it said.

Seriti’s chief people officer, Ndumi Khoza, said despite efforts to cut costs over the past five years, the colliery is not commercially viable and can become a financial risk to Seriti Group.

“If no action is taken, Klipspruit will lose between R657 million and R949 million in the 2024 financial year alone, which puts the whole group at a huge business risk.”

Mining companies have previously warned trade unions of possible job losses as they cannot get their commodities to market due to Transnet’s deteriorating rail infrastructure.

Reporting with Bloomberg