Impala Platinum Could Shed Close to 4,000 Jobs After Price Rout — Update

By Christian Moess Laursen

Impala Platinum could lay off around 3,900 workers to save costs and improve operational efficiency in response to a platinum price rout and persistent cost inflation ripping through the sector.

The South African miner--the world's second-biggest platinum producer--said Friday that a proposed restructuring could affect 9% of the labor workforce across its Rustenburg, Bakofeng and Marula operations as well as at corporate offices, and result in a 30% reduction in head-office costs.

The measures are aimed at optimizing operational efficiencies and resources, as well as to ensure that each of its business units contributes sustainably and profitably through the fluctuations of platinum-group metals cycles, it said.

The company, also known as Implats, cited sharply declining PGM prices and persistent inflationary pressures squeezing its profitability and cash flow.

Platinum prices have plummeted over the past 12 months, with futures down 17%. In early 2021, platinum futures peaked close to $1,300, compared with the current price of around $923.

Additionally, PGM miners in South Africa--the world's largest producing country--have been particularly hit by inflationary costs, with the rand being one of the worst performing currencies of last year.

Global macroeconomic uncertainty and rising geopolitical tensions have further added to downside risks to industry sustainability, Implats said.

"Cost-saving, capital-deferment and voluntary labor-reduction initiatives to date have not sufficiently offset the impact of persistently lower prices," Chief Executive Nico Muller said.

The proposed streamlining follows a string of similar actions by South African peer Sibanye-Stillwater.

In October, it warned that more than 4,000 workers could be affected by a restructuring of its PGM operations. Earlier this month, it said that more than 3,000 jobs at its South African gold operations were at risk.

Implats said no final decision on the proposed restructuring would be taken before proper consultation with affected employees or representatives.

The company didn't disclose whether the restructuring would hit output. In fiscal 2023 ended June 30, the Rustenburg site produced 1.2 million ounces of PGM, or around 40% of group PGM production. Bakofeng and Marula produced 507,00 ounces and 241,000 ounces, respectively.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

April 26, 2024 07:33 ET (11:33 GMT)

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