Global economic crisis impacting on Palabora Copper
Palabora Copper, South Africa's largest producer of refined copper, which employs about 2300 people directly, has intensified its cost containment initiative, following the further global decline of commodity prices and the lack of demand for its refined copper produce.
“This has impacted negatively on our profitability, while the cost of running our business remained higher. Therefore, Palabora is looking into how best we can keep our operations running efficiently in the short-term, while at the same time protecting the jobs of our people,” according to the company’s Corporate Affairs Manager, Hulisani Nemaxwi. Nemaxwi added that the current situation also requires the company to make some major and instant decisions, in order to weather the storm.
“As a result, Palabora has already stopped the trucking of its magnetite to its nearby Mica and Bosveld stations in Ba-Phalaborwa and is looking into further reduction of is allocated magnetite wagons to Maputo and Richards Bay terminals,” he said.
He added that Palabora is also one of the few companies in the continent executing one of the largest underground extensions of life of mine projects known as the Lift II valued at about R 9.3 billion.
“The current situation will require that some of the areas, not critical to the project’s long-term success, be delayed in order to better manage and preserve its cash flow. This will also impact on the number of contractors that were expected to come to site this year and on the initial number of jobs that were expected to be created,” explained Nemaxwi.
He went on to say during the recent Chamber of Mines engagement with the Department of Mineral Resources and mining stakeholders, it was announced that some 11 000 jobs from the mining sector across the country are already threatened due to the current market situation. According to Acting Chief Financial Officer of Palabora, Griffiths Baloi, the company will continue monitoring the markets and adjusting its plans accordingly.
“The market does not show any positive signs of recovery during the remainder of 2015 and we will have to devise innovative means to keep running our operations.”
The major union in the mine, the National Union of Mine Workers, convened an urgent mass meeting last week Thursday at Namakgale town hall to brief its members on the latest developments.
The branch secretary, Oupa Magagula said currently there isn’t much the union can do, but they will have continuous meetings with management and will keep on convening mass meetings with their members to update them on the latest developments.
