Platinum producer Atlatsa to shut two shafts in South Africa - CNBC Africa

Platinum producer Atlatsa to shut two shafts in South Africa

Southern Africa

by Reuters 0

Atlatsa said it aimed to close two high-cost shafts at its Bokoni mine in South Africa on Wednesday. Photo: Wikimedia

Platinum producer Atlatsa said on Wednesday it aimed to close two high-cost shafts at its Bokoni mine in South Africa and had started talks with unions about potential lay-offs, the latest such moves in an industry hit by low prices.

Mining job cuts are politically a sensitive issue in South Africa ahead of local elections next year. The government and unions agreed a broad but non-binding 10-point pact in August aimed at stemming mounting lay-offs in the face of falling prices and soaring costs.

Bokoni is a joint venture between Atlatsa and Anglo American Platinum, which last week sealed a deal to sell its costly and labour-intensive Rustenburg operations west of Johannesburg to Sibanye Gold.

The company did not say how many jobs could potentially be at risk. The entire operation has 6,000 employees, with 2,000 at the shafts slated for closure.

Atlatsa's Johannesburg shares leapt 22 percent to 50 cents on the announcement.

Atlatsa said the shafts had "remained operational for longer than originally contemplated, a position which is no longer sustainable in light of limited available ore reserves ... and continued depressed platinum group metal prices."

It said the shafts, UM2 and Vertical Merensky, were being placed on "care and maintenance" - industry speak for mothballing unprofitable operations.

Platinum's price is currently fetching around $960 an ounce, pinned near 6-1/2 years lows.

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