Amplats and Shabangu remain in talks on layoffs

By Allan Seccombe

The threat by Mineral Resources Minister Susan Shabangu to review the mining rights held by Anglo American Platinum (Amplats‚ AMS) has not materialised because the parties are in talks.

Amplats‚ the world’s largest platinum producer‚ last month provoked the anger of Shabangu‚ the ruling African National Congress and trade unions when it unveiled a proposal to idle four shafts‚ sell its Union mine and cut up to 14‚000 jobs.

Shabangu criticised Amplats for not “adequately” consulting her department on its plans and she warned there would be close scrutiny of the mining rights held by Anglo American‚ the 80% owner of Amplats‚ to ensure it complied with the terms of its licences.

Amplats subsequently suspended its formal retrenchment process for 60 days to talk to the mineral-resources and labour departments and unions to appraise them of its plans that resulted from a year-long study of its entire business and why it needs to focus on the profitable assets.

At the Mining Indaba in Cape Town on Tuesday‚ Shabangu said the review was not happening.

“We are talking‚ so we can’t review when we are talking. We only review when there’s non-compliance‚ but also when the party doesn’t engage‚” Shabangu said. “We are positive the discussions will yield a positive result as well as addressing concerns we’ve had from them.”

She conceded there was frustration within the department at the way Amplats’ dealt with the proposed restructuring‚ which led to her responding the way she did.

“We’ve discussed what led to that and they’ve acknowledged that one of the biggest challenges was their approach was legalistic‚” she said.

“We said we can’t continue engaging based on a legal approach because it stifled discussions and trust among the parties because you can’t explore beyond what the legal framework says.

“If we are going to find a lasting solution we have to open up‚ be frank and share to find a mutual solution‚” she said.

Amplats CEO Chris Griffith said on Monday the minister’s outburst and that of ANC secretary general Gwede Mantashe were “not helpful”.

Mantashe said rights over idled mines should be seized and auctioned so other parties could continue mining them and save jobs. There was nothing in law that would allow the government to seize those rights‚ Shabangu said on Tuesday.

“I can't speak on behalf of Gwede. For whatever reason he might have made a threat‚ but as the regulator it's important for us to recognise all factors affecting the industry and what are the best options for the economy. That's our approach to the current situation with Amplats. What is best for the company and the economy. It can't just be a knee jerk reaction for us‚” she said.

Anglo American‚ which owns 80% of Amplats‚ and AngloGold Ashanti are coming under pressure from some shareholders to separate their international and South African assets‚ arguing those companies are undervalued relative to their peers because of their exposure to SA.

"Based on our analysis‚ AngloGold’s shares could increase in value by up to 68% if the company was to split its business into South African and non-South African businesses‚" said billionaire John Paulson’s hedge fund Paulson & Co‚ which owns a stake in AngloGold‚ in a report.

Gold Fields (GFI) has unbundled three deep-level mines into a new company called Sibanye that lists next Monday. It retains a single mechanised mine‚ South Deep‚ in SA. The market will be watching to see if Gold Fields’ shares are re-rated by removing three labour intensive mines that were hard hit by labour unrest late last year.

“We need more investment to come into SA. On the basis of that we can also not say when you move towards diversification you can't do it. We are part of the globe but we must create a space to ensure that through those assets we attract more investments‚” Shabangu said.