The platinum division of Anglo American will be reducing its workforce by 3,700 employees due to a decrease in the price of the metal.

The platinum division of Anglo American will be reducing its workforce by 3,700 employees due to a decrease in the price of the metal.

The British mining company, Anglo American, plans to reduce its workforce in South Africa by 3,700 employees in order to enhance the performance of its struggling division.

On Monday, Anglo American Platinum (Amplats) announced plans to reduce its workforce due to a significant decline in the prices of platinum metal. This resulted in a significant decrease in profits in the previous year.

Approximately 20% of the employees at the Johannesburg headquarters of the company are facing the risk of losing their jobs, as Amplats is also evaluating the positions of 620 additional contractors.

Amplats, a company owned 79% by Anglo American, saw a decrease in profits to R14 billion (£586 million) in 2023, a 71% drop from R48.8 billion in 2022.

The company cited “macroeconomic uncertainty” and a 35% decrease in the price of platinum group metals as reasons for the decline.

The decrease was caused by the decline in worth of palladium and rhodium, significant components utilized in catalytic converters for gasoline and diesel automobiles. There has been a decrease in demand as more car manufacturers increase their production of electric vehicles.

Amplats’ struggles will come as another headache for Anglo American, one of the biggest companies on London’s FTSE 100, which has lost billions of pounds off its value in recent months. Analysts suggested in December that the mining company had become a takeover target after its stocked dropped by 45% across 2023.

Craig Miller, the CEO of Amplats, stated that the company had put in place various cost-reduction efforts in response to both global and local challenges. However, due to the prolonged low prices, they will need to take additional measures.

Anglo American, which is also the main shareholder in De Beers, the world’s largest diamond miner, is scheduled to report its annual results on Thursday. Investors will be keen to see any signs of a turnaround.

Amplats will begin a consultation period with trade unions and non-unionised staff, with the final number of job cuts coming after this period. The company has operations across northern South Africa.

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Miller stated that the company had made the decision as a final option and recognized that the reduction in jobs would have a significant effect on employees, their families, and the surrounding communities.

He stated that these measures are crucial in order to maintain the employment of a large number of workers and contractors. This will benefit our stakeholders by providing income through wages, taxes, and royalties, and also by supporting local suppliers through the purchase of goods and services.