Impala Platinum (Implats) has begun offering voluntary job cuts to miners at its mines in South Africa as part of its measures to combat a steady decline in platinum group metals (PGM) prices.
Implats spokesperson Johan Theron told Reuters that the miner had begun the process at its head office last month and is now expanding the offerings of exit packages to its Rustenburg mining complex.
It is unclear how many jobs Implats plans to cut.
“We are obviously doing everything to reduce costs,” Theron said. “Labour is a big cost component, so you always start with labour by offering voluntary separation packages.”
The price of palladium has plunged nearly 40% so far this year, while the primary metal platinum is down 14%.
Platinum mining shafts in South Africa are among the world’s deepest, oldest and most expensive to run, exacerbating the impact of declining PGM prices.
Theron said the company’s Rustenburg mines are scraping by for now and did not rule out further action if prices remain low.
“The shafts are not making money, but they are not losing money either. They are just getting by,” Theron said
The miner is also considering postponing investment in its projects in Zimbabwe and expansion projects at its South African mines.
Implats joins its rival, Sibanye-Stillwater, in cutting jobs in South Africa due to declining PGM prices.
Sibanye announced last month that it would enter into Section 189 consultations to retrench over 4,000 workers amid the company’s restructuring.
CEO Neal Froneman said job cuts in platinum mining are unavoidable as prices continue to fall, requiring “significant restructuring” of the sector.
“We certainly can’t run unprofitable shafts, and our cost structure is probably the lowest in the industry. So if we have loss-making shafts, of which we have a few, they will have to be closed, and I say this with all the sensitivities on potential job losses,” said Froneman.
Sibanye said that above-inflation increases in key cost components such as electricity, water, wages, and fuel, combined with the recent decline in PGM prices, have significantly impacted the global PGM industry’s profitability.
Some of South Africa’s diversified miners have also begun to cut jobs, such as Anglo American and Glencore.
Anglo American has begun cutting jobs at its head office in South Africa, while Glencore has begun retrenchment processes at its iMpunzi coal-mining complex.