SA slams ‘arrogant’ Anglo
“Anglo's profit motives are at the expense of South Africans”
The South African government this week finally woke up to global resources giant Anglo American’s “arrogance” when its South African unit announced radical plans to close two mines and sell another one, steps which will result in 14 000 workers being laid off.
Anglo American Platinum (Amplats), the world’s biggest producer of precious metals said it would lay off 14 000 of its 60 000-strong work force, torching a political storm in an economy battling rising unemployment and tepid growth.
The government has threatened to review all of Anglo’s mining licences in the country, as the ruling ANC feels the company wants to “divest its business from South Africa and relegate the mines in South Africa to dogs”.
Mineral Resources Minister, Susan Shabangu, launched a scathing attack on Amplats, calling company CEO, Chris Griffiths, “arrogant”. Shabangu said Amplats did not consult the government on its plans to retrench 14 000 workers, adding that profits cannot be at the expense of employees.
“Amplats decided to undermine all of us, it’s quite clear that they had a plan and they had no intention of consulting. This shows Amplats continues to be arrogant and undermining stakeholders, this is not the first time,” Shabangu said.
Amplats plans to close two mines in Rustenburg and divest from its Union operations. The restructuring would deliver US$435 million in annual benefits by 2015 but will slash production by about 400 000 ounces of platinum, CEO Griffiths said.
The firm says the review was necessitated by rising production costs and subdued platinum prices because of the now cyclic global economic crisis.
“The platinum business has attractive underlying fundamentals, but we are facing tough decisions to restore profitability to our operations.
“We must evolve to align the business with our expectations of the platinum market’s long-term dynamics and address the structural changes that have eroded profitability over time,” Griffiths said.
Griffiths said management had “no choice but to make this company profitable”.
“This isn’t a popular message, but it is important for the country to have profitable businesses,” he said.
However, Shabangu accused Amplats of undermining the government and workers.
“They have been playing games with us; they have been talking about restructuring, and the last time we had a meeting with Cynthia Carroll (Anglo American outgoing CEO) and Chris (Griffiths), and they were going to come back to us and consult with my team on their proposal on restructuring, they have not done that and only Amplats can do that,” Shabangu fumed. She added that Anglo’s profit motives are at the expense of South Africans.
“It can’t be in the interest of the country when they undermine the government of the country, when they undermine the same workers who make them to be profitable, it’s not only about them, it’s also about workers, those are human beings, those are people who must be consulted, they need to talk to them, make them understand,” Shabangu said.
She said even though government understood that the platinum industry was under severe strain, Anglo was not the only affected firm.
“We don’t understand what the compelling reasons are (for cutting 14 000 jobs), the only reason we understand is that the platinum industry is not doing well,” Shabangu said.
“They are telling us that they are going to come back and talk to us or they are saying they are going to talk to labour, listen to this, the arrogance of Chris. He said in his statement he is going to talk to labour and he is not going to talk to government.
“He is not going to talk to us as the regulator, so what it means is its sufficient for him to consult workers and leave government out when we have got procedures which should be followed … its themselves who are putting their licences in jeopardy, not us, it’s themselves,” she added.
The ANC weighed in saying: “This action by Amplats convinces us that a move to have all the mining licences reviewed is not misguided. Our country cannot continue to be the hosts of callous extraction of minerals for the sole benefit of profits for external investors with limited beneficiation to our own communities and in particular the complete disregard for the plight of workers is not only a travesty but is a disgrace to the industry.”