Amplat is Closing Four Shafts and Firing 14000 Workers

In South Africa there is a law that says that every company is required to consult with the government before laying off a large number of workers. The companies...

In South Africa there is a law that says that every company is required to consult with the government before laying off a large number of workers. The companies are supposed to go through a 60-day consultation period before they start firing any of the workers. Amplat failed to consult with the local government before making the decision to close one section of their mine including four different mine shafts and lay off 14,000 local workers at the same time. The Mining Minister Susan Shabangu says that by not consulting with the local government they are putting their mining licenses in serious jeopardy. There is a good chance that they could lose the license if they go through with the layoffs without working something out with the government.

A Loss in Value

The mine shafts are being closed down because the value of platinum has dipped down pretty noticeably. The precious metal is used in a number of different applications but one of the most popular uses is in catalytic converters within vehicles. The value has dropped by 10% between 2012 and 2011 leaving the company with less of a profit margin than they had before.

Anglo American

Amplat is owned by the UK mining company Anglo American. The plans to close the shafts has led to a stock value drop by 6.8% for Amplat and a drop of 2.4% for Anglo American.

Balancing Out the Situation

Amplay has stated that they will balance out all of the laid off workers by hiring them to work on new jobs that they are going to create in infrastructure, housing as well as small business development. The firm also went on to try and persuade the government that the announcement that they made was simply the beginning of their consultation process, and that they were going to start talking with the government about the whole situation. “By creating a sustainable, competitive and profitable business, we will be in a stronger position to continue substantial investment, provide more secure and stable employment, and to benefit our customers, suppliers, shareholders… and the South African economy as a whole.” This is exactly what the executive of Amplats had to say. Chris Griffiths is basically stating that the only way to ensure that the rest of the workers have the chance to continue working at the company is if those four shafts are closed down. He is also eluding to more jobs being created down the road, but he doesn’t detail any specifics.

Why the Consultation Period

The consultation period is put in place because it is supposed to provide an opportunity for the business and the government to come up with a solution to the problem that is going to cost all those people their jobs. Amplats already has it in their head that they are going to close those four shafts and fire all of those people, and there really isn’t much to consult about with the government according to the minister. He says “How do they expect us to participate… because they have finalised everything,”