Anglo American says it supports the Anglo American Platinum’s conclusions of the review of its business, announced in February 2012, and endorses the clearly defined proposed strategy to create a sustainable, competitive and profitable platinum business for the long term benefit of all its stakeholders.
Cynthia Carroll, Chief Executive of Anglo American and Chairman of Anglo American Platinum explains its subsidiary has concluded its thorough business review in the context of the company’s revised demand growth expectations and the many structural changes that have affected the profitability of the platinum business in recent years.
“In that context, Anglo American Platinum has identified the optimal mining configuration and the appropriate processing footprint, overhead structure and commercial strategy to improve profitability and drive greater performance. The objective has been clear from the outset – to create a sustainable business by facing the tough and necessary decisions for the benefit of all its many and varied stakeholders,” Carroll says.
“Anglo American recognises the potential impact of these proposals on our people and their communities. We have designed a comprehensive social plan to ensure we make a positive difference in the Rustenburg and labour sending areas, creating at least the same number of new jobs as may be affected as part of the restructuring. A stable and competitive Anglo American Platinum will be on a sure footing to continue substantial investment in South Africa for the long term, enabling more secure employment for its 45,000 employees and delivering more sustainable returns.”
Anglo American Platinum is Anglo American’s 79.8% owned subsidiary.
Under the review process, Anglo American Platinum will reconfigure its Rustenburg operations into three mines, with aligned processing operations, divest the Union mines at the right time – to maximise value under different ownership.
The review will deliver R3.8 billion of annual benefits by 2015, through efficiency and cost reduction initiatives; including annual savings of R390 million from optimising its overhead structure and provide a comprehensive package of support to its employees and communities in Rustenburg and the labour-sending areas.
Equally, the process will create at least 14,000 new jobs to balance the number of jobs that may be affected by the restructuring.
Chris Griffith, CEO of Anglo American Platinum, says 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. We have reviewed our business across the entire value chain, building upon the steps taken to improve operational performance in recent years, and will be consulting extensively with our stakeholders in relation to our proposed changes.”
He says the company has designed a comprehensive social plan to ensure that we can compensate for any necessary labour restructuring and make a positive difference through job creation.
“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 – which include more than one million beneficiaries in our local communities and key labour sending areas via our Alchemy community share ownership programme and some 48,000 employees in our Kotula employee share scheme – and the South African economy as a whole.”
