Entire workforce lay off at Bokoni Mine
Bokoni Platinum Mine will lay off around 2 600 workers following a R500 million operating loss in the first six months of this year.
MOKOPANE – Notwithstanding various attempts since 2014 to restructure the Bokoni Mine through shaft closures and other measures in order to achieve profitability, Bokoni Mine’s operations remain cash negative after capital expenditure.
There is a declining demand for platinum from the automotive sector as well as for platinum jewellery and from the Chinese market.
In a press release Atlatsa, one of the Joint venture partners of the mine, said they and Anglo American Platinum (Bokoni JV Partners), together with mine management, have continued to investigate a range of further mine re-configuration options but all of the options assessed would mean significant cash outflows in the short to medium term with material execution risk.
The immediate to medium term outlook for Bokoni Mine remains negative, given the current weak Platinum Group Minerals (PGM) pricing environment, expected to remain under pressure for the foreseeable future.
The Bokoni JV Partners have also actively investigated various potential funding and corporate ownership alternatives, including seeking to introduce new funding partners and/or a disposal of Bokoni Mine. However, given Bokoni’s current operational challenges, continued operational losses and negative cash generation, the depressed PGM environment, the negative medium term PGM pricing outlook and Atlatsa Group’s significant debt levels, attempts to implement such alternatives have proven unsuccessful.
“In the circumstances, the Bokoni JV Partners are no longer able to continue funding losses at the mine with no reasonable short to medium term turnaround prospects. The Bokoni JV Partners have therefore agreed to implement the 2017 Restructure Plan as the most appropriate strategy, having regard to long term asset value preservation and potential future sustainability of Bokoni Mine,” the statement reads.
During the first phase of the restructuring Atlatsa will place the Bokoni Mine operations on care and maintenance. Anglo American Platinum has agreed to fund, via a loan account to Bokoni Mine, all once-off costs associated with placing the mine on care and maintenance, as well as ongoing care and maintenance costs, up until 31 December 2019. Atlatsa will also restructure its corporate head office and associated overhead costs in order to right size.
The National Union of Mineworkers (NUM) asked that the Departments of Mineral Resources and labour be involved in the restructuring process.
Phillip Mankge, North East region Spokesperson of NUM said this would lead to a very high rate of unemployment, as many more contracted companies would also not have jobs any more.
Mining contributes around 30% to Limpopo’s Gross Domestic Product.
