Angloplat, Shabangu in licence discussion
Business / 21 Jan '13, 08:00am
ANGLO American Platinum (Angloplat) and the Department of Mineral Resources were locked in a frantic effort late last week to contain the damage that emerged from a public relations disaster precipitated by Angloplat’s lack of consultation and the regulator’s threat to scrutinise the company’s mining licences.
Angloplat chief executive Chris Griffith and Mineral Resources Minister Susan Shabangu met on Thursday to discuss the restructuring plan, in which 14 000 jobs are on the line, with 13 000 from Angloplat’s Rustenburg operations.
They agreed to discuss the proposed restructuring over the next 90 days to determine how “they can best work together to achieve their shared objective for the benefit of all stakeholders”, the company said in a statement.
Earlier last week Shabangu threatened to review Angloplat’s mining licences.
Meanwhile, ANC secretary general Gwede Mantashe said Angloplat should put its idled shafts up for sale, giving junior mining firms an opportunity to take over these operations.
The ANC called for the company to surrender its licences for the four shafts it planned to mothball so they could be put on public auction.
When asked if the company was considering legal options following threats by Shabangu, an Angloplat spokeswoman said on Friday that the firm was consulting with the department and “what the minister said before is null and void. We have had a constructive meeting with Minister Shabangu yesterday [Thursday] and we will be engaging positively on all matters relating to the portfolio review proposals.”
The meetings between the department and Angloplat will do little to prevent the oncoming onslaught of job losses. The platinum sector is taking a lot of strain and the industry finds itself with high input costs, including labour and power, while material surpluses of product and subdued demand result in depressed prices.
Cadiz Corporate Solutions analyst Peter Major asked on Friday: “What does Susan want Chris to do? Does she want him to have another rights issue? Shareholders are not willing to pump in so much money because the company has run up debt in the last three years.”
Angloplat said its talks with the department would run parallel with the consultation process that had commenced under section 189 of the Labour Relations Act around possible retrenchments.
The Commission for Conciliation, Mediation and Arbitration was asked by Angloplat to facilitate discussions between itself and unions around possible retrenchments.
The first facilitation meeting was set for Friday, but was postponed after parties agreed to allow the unions to consult their members and finalise their delegations. The process will resume on January 30.
If the minister proceeds with threats to review its mining licence, Angloplat could contest the legality of the government’s right to do so.
Webber Wentzel partner Peter Leon said the department would have to prove proposed restructuring breached the conditions of its mining rights or violated the Mineral and Petroleum Resources Development Act (MPRDA).
“Only then could the minister justify suspending the company’s mining rights under section 47(1)(b) of the MPRDA. In any event, before taking such a drastic step the minister is under an obligation to give written notice to Angloplat setting out the reasons for her proposed action, and giving the company a reasonable opportunity to rectify the situation.”
Experts say a mining right is an administrative right and if any of the terms and conditions are not complied with the department can review the non-compliance and take enforcement action.
“Closing a shaft could affect compliance with the mining works programme. The department would have to act reasonably and could not act in a vindictive way,” Bowman Gilfillan director Claire Tucker said.