AN illegal work stoppage has taken place since Thursday, June 27 at the North Shaft of Impala Platinum’s (Implats) Impala Bafokeng BRPM operation resulting from contractors on the mine demanding permanent positions.
This is the second incident of illegal industrial unrest at Impala Bafokeng after an “illegal underground protest” took place in December which was caused by “misinterpretations and misunderstandings brought to the fore by the recent change in ownership at Impala Bafokeng:.
According to an Implats’ statement, “the company has served a court order on the individuals who instigated the illegal strike action which declared it unprotected and interdicted employees from participating or engaging in any acts of violence, intimidation or harassment”.
The statement added, “these demands take place amid a difficult operating environment for platinum group metal (pgm) producers given the depressed pgm prices.
“Impala Bafokeng, along with Implats’ other South African operations is currently undergoing a Section 189 (3) consultation process in terms of the Labour Relations Act which may lead to staff reductions.
“Business sustainability is imperative to preserve livelihoods as far as possible. Any work stoppages in the current metals price environment will, however, impact the group’s efforts to preserve jobs.”
Production interruptions are unwelcome at the best of times but Implats, along with its peer group, are enduring difficult markets. Nico Muller, CEO of Implats has called for investors to exercise patience in respect of its investment in Bafokeng.
Implats bought Royal Bafokeng Platinum (RBPlat) for R150 a share last year, seeing off a higher offer from Northam Platinum. In January 2022, when the offer became mandatory, rhodium was trading at about $19,500 an ounce. Since then, PGM prices have deteriorated heavily. Rhodium is now worth about $4,625 an ounce, according to Johnson Matthey.
Furthermore, Bafokeng’s newly commissioned Styldrift mine is operating at 70% of capacity, making it capital inefficient. According to a report by RMB Morgan Stanley in April, the Bafokeng assets will burn just under $100m in negative cash flow this calendar year, assuming current stay-in-business capital and after factoring in announced restructuring.
In April, Implats said about 3,900 jobs were on the line as it was forced it to consider retrenchments.
Implats’ headline earnings in the six months to December fell 77% to R3.3bn compared with the same period last year, as weaker PGM prices offset gains in production, sales volumes and from cost control.