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South Africa’s anti-trust authorities concerned over job cuts after Sibanye acquisitions

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Competition Tribunal said on Tuesday it was weighing its approval of Sibanye Gold’s plan to acquire platinum mines over concerns that 510 jobs could be lost if the deals proceed.

Sibanye last year said it would buy Anglo American Platinum’s labour-intensive and costly Rustenburg mines and Aquarius Platinum.

Both transactions were approved by the Competition Commission, which investigates deals for any anti-trust issues, on condition that no jobs would be lost and the firms would keep the black empowerment policy to protect small businesses.

The government has set empowerment goals to redress the absence of South Africans excluded from the mining industry under apartheid in a policy meant to spread economic wealth to the black majority.

Sibanye has sought to have these conditions amended to allow for layoffs, the Competition Tribunal, which makes a final ruling on proposed mergers or acquisitions, said in a statement.

Sibanye argued in favour of layoffs at a hearing held by the Tribunal on Monday that was attended by unions, reports said.

Sibanye’s CEO Neal Froneman was quoted by Business Day newspaper as saying the deal might not proceed without retrenchments.

Froneman was not available to comment when Reuters tried to reach him.

The Tribunal is expected to make a final decision soon.

About 250 job would be lost through the merger with a further 260 jobs expected to be cut should Sibanye combine all its mining operations and head offices with the target companies, causing an overlap of important positions.

Competition Tribunal spokeswoman Chantelle Benjamin said labour unions and the Competition Commission lobbied for jobs to be cut only after three years while Sibanye proposed two years. She said most of the jobs lost would be at the head offices and senior management.


(Reporting by Zandi Shabalala; Editing by James Macharia)

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South Africa’s Impala Platinum sees up to 20% fall in H1 profits

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JOHANNESBURG (Reuters) – South Africa’s Impala Platinum said on Monday it expected half-year profits to fall by as much as 20 percent due to lower rand prices for its main commodity.

Headline earnings per share – a measure of profit which strips off certain one-off items – will be between 50 cents and 59 cents, a decline of between 20 percent and 10 percent.

Impala, the world No. 2 producer of the metal used for emissions-capping catalytic converters in cars, said the rand prices for platinum are down 15 percent compared to a year earlier causing the decline in profits.

Shares in Implats, which have more than halved in value over the last year, fell 0.74 percent to 35 rand by 1500 GMT.


(Reporting by Zandi Shabalala; Editing by James Macharia)

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Kumba Iron Ore sees 2015 profit plunging as supply glut persists

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JOHANNESBURG (Reuters) – South Africa’s Kumba Iron Ore said on Tuesday it expected full-year earnings to December 2015 plunge as much as 67 percent as it battled slumping prices for the steel-making ingredient.

The unit of Anglo American said headline earnings per share (EPS) are expected to fall by between 65 percent and 67 percent to 11.45 rand and 12.05 rand.

Kumba is due to release its full-year results on Feb. 9.

Headline EPS is the main gauge of profit in South Africa and strips out certain one-off items.

Iron ore prices fell about 35 percent in 2015 due to a supply glut and growth concerns in top consumer China, forcing Kumba to cut jobs and restructure its main mine, Sishen.

Kumba took a 6 billion rand ($374 million) writedown charge in 2015 for the reconfiguring of the Sishen mine.

Its shares initially fell as much as 8 percent before recouping losses to close 3.1 percent higher at 37.51 rand.

“The market had expected that there will be some write off. It is good that Kumba is taking the medicine it needs and focusing on cutting costs,” said Sanlam Private Wealth portfolio manager Greg Katzenellenbogen.

The world’s largest producer of iron ore, Vale SA, said on Thursday it would recommend to its board that no dividend be paid to shareholders this year because of the slump in commodity prices.

($1 = 16.0535 rand)


(Reporting by Zandi Shabalala and Thekiso Anthony Lefifi; Editing by Tiisetso Motsoeneng and David Evans)

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South African mines post lowest annual death toll of 77

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PRETORIA (Reuters) – South Africa’s mines minister Mosebenzi Zwane said on Thursday that 77 workers were killed in mining accidents in 2015, the lowest number on record and down from 84 in 2014.

South Africa’s mines are the deepest and among the most dangerous in the world but industry fatalities have been falling, a trend rooted in improved safety practices and a shrinking labour force as production declines.


(Reporting by Tiisetso Motsoeneng; Writing by Ed Stoddard; Editing by James Macharia)

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Platinum producer Lonmin cuts jobs and costs

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JOHANNESBURG (Reuters) – Lonmin said on Thursday it would continue to review its services and reduce costs, mainly through job cuts, as the sliding price of platinum bites further.

The company said labour costs fell 194 million rand ($11.8 million) in the last three months of 2015 after it shed 5,077 jobs, or 84.6 percent of its planned reduction in headcount.

“Progress continues with the restructuring programme due to the new benchmarked operating model and removal of high-cost production to ensure the business remains viable,” Lonmin said in a statement.

It is targeting savings of 700 million rand in 2016.

Hurt by a 2014 strike, rising costs and a plunging platinum price, Lonmin raised $400 million through a cash call in December which failed to find favour with shareholders and priced shares at about a penny each.

Some of the proceeds of the rights issue were used to pay down debt, leaving the company with $69 million in cash at end of December.

The miner said production of refined platinum reached 171,441 ounces in the three months to the end of December, up 22.6 percent from a year earlier.

The price of platinum has been on the decline for about five years. It fell 26 percent last year and is trading at less than half its 2011 peak.

Shares in Lonmin have lost nearly all of their value over the last year. It was the worst-hit of three top platinum miners by the 2014 five-month labour stoppage.

Lonmin maintained its full-year production guidance of 700,000 platinum ounces and its capital expenditure plan of $132 million despite projecting sustained weaker metal prices.

($1 = 16.3897 rand)


(Reporting by Zandi Shabalala; editing by David Clarke and Jason Neely)

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South Africa’s Amplats sees FY profit plunging on impairments

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JOHANNESBURG (Reuters) – South Africa’s Anglo American Platinum Ltd (Amplats) on Monday flagged a sharp fall in full-year earnings due to impairments, write-downs and restructuring costs in bid to survive plunging in commodity prices.

Headline earnings per share, the main gauge of profit that strips off certain one-off items, is expected to be down to between 25 cents and 55 cents compared with earnings of 301 cents a year earlier.

Amplats, a division of Anglo American Plc, is undergoing tough cost cutting to deal with plunging prices and low demand for its precious metals and the effects of a crippling five-month strike in 2014 at its biggest operation.

The top platinum producer said the fall in profits was due to efforts to make the business more efficient, cash generative and lean by reorganising operations and structure.

Anglo American, the world’s fifth-biggest miner by market value, is on a drive to sell more assets and whittle its business down to three divisions to cope with sharp fall in commodity prices.

Amplats said headline earnings per share would have risen to 412 cents if it had excluded the impact of the restructuring costs, a loan to its joint-venture partner Atlatsa and the increase in inventory.


(Reporting by Zandi Shabalala; Editing by Gopakumar Warrier)

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South Africa’s Kumba Iron Ore tells union to brace for lay-offs

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JOHANNESBURG (Reuters) – Kumba Iron Ore has told South Africa’s National Union of Mineworkers (NUM) it will issue lay-off notices this year if low prices persist for the steel-making ingredient, the union’s general secretary said on Wednesday.

“The price has put them in dire straights and there is a prospect of them issuing a Section 189 notice at Sishen mine,” NUM General Secretary David Sipunzi told Reuters.

He was referring to the regulatory process South African employers must follow before they lay off staff.

“They have been trying to sensitise us to this possibility. If the price remains like this for a few months they will have no choice but to issue a Section 189,” he said.

Officials from Kumba were not immediately available for comment.

The group has said it plans to reconfigure its Sishen mine, the largest iron ore operation in Africa, and was targeting 2016 production there of 26 million tonnes, down from a previous guidance of 36 million tonnes.

Lay-offs are a politically thorny issue in South Africa, where the jobless rate is around 25 percent and local elections are expected this year. The NUM is also a key political ally of the ruling African National Congress (ANC).

Sipunzi said he expected to see more lay-off notices this year from other sectors but the union wanted to work with companies to find ways to minimise job cuts.

In line with other commodities, prices for iron ore have been sliding due to oversupply and and slowing economic growth in China, the world’s bigest metals consumer.

Mining giant BHP Billiton said on Wednesday that it saw no recovery in iron ore or coal prices in the next few years.


(Reporting by Ed Stoddard; Editing by James Macharia)

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Anglo American to sell Australian Callide coal mine

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callide coal mine

JOHANNESBURG (Reuters) – Global mining firm Anglo American will sell its Callide coal mine in Australia to Batchfire Resources, it said on Wednesday.

“The transaction will be effected via a sale of shares in the subsidiary companies holding Anglo American’s interest in Callide,” the company said in a statement.

Anglo said the terms of the deal were confidential.

The company announced a major restructuring in December, saying it would offload three-fifths of its assets as it attempts to tackle sliding commodities prices.

Callide, an open pit thermal coal mine that produced 5.6 million tonnes in the first nine months of 2015, is one of four Australian coal mines the company plans to sell.

Anglo announced last month it would sell its majority interest in Dartbrook coal mine to Australian Pacific Coal Ltd in a deal worth up to A$50 million ($34 million).

The company is scheduled to give more details on its future global portfolio in February.

The overhaul at Anglo American highlights the scale of the fallout from the commodities slide, which is forcing mining companies across the board to cut jobs, investment and costs.

($1 = 1.4571 Australian dollars)


(Reporting by Olivia Kumwenda-Mtambo; editing by Susan Thomas)

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Tanzania’s Q3 2015 GDP growth boosted by construction, mining

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DAR ES SALAAM (Reuters) – Faster growth in the construction, mining and transport sectors pushed Tanzania’s growth higher in the third quarter of 2015 compared to the same period a year earlier, the statistics office said on Wednesday.

The economy grew 6.3 percent year-on-year in the third quarter compared with 5.4 percent in the same quarter in 2014, the state-run National Bureau of Statistics (NBS) said.

“Sectors that drove GDP growth in Q3 2015 include construction, mining and quarrying and transport,” Albina Chuwa, director general of NBS, told a news conference.

Tanzania’s total exports of goods and services during July-September 2015 rose by 3.3 percent, Chuwa added. Gold accounts for 89 percent of Tanzania’s mineral exports.


(Reporting by Fumbuka Ng’wanakilala; writing by Drazen Jorgic; Editing by George Obulutsa and Andrew Heavens)

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Zambia to introduce sliding mineral royalty tax in 2016

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LUSAKA (Reuters) – Zambia, Africa’s second largest copper producer, will in the first quarter next year introduce a new sliding mineral royalty tax that will be adjusted depending on metal prices, a government spokesman said on Tuesday.

Zambian royalty taxes will range between 3 percent and 9 percent depending on the global price of metals, presidential spokesman Amos Chanda said.


(Reporting by Chris Mfula; Editing by Joe Brock)

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