Strong-Armed By Unions And South Africa's Government, Amplats (AGPPY) Scales Back Job Cuts By 8,000

Anglo American Platinum Ltd. (Otcmkts:AGPPY) promised to cut 8,000 fewer mining jobs in South Africa on Friday after the government and combative unions there vowed to fight any pink slips.

The world’s top platinum producer’s original plan to slash 14,000 jobs in an effort to regain profits was met with intense government pressure. On Friday, the company, a unit of Anglo American, said it would keep open one of the four shafts slated for closure near Rustenburg, according to Reuters.

But the lessened layoffs may not be enough to quell the region’s restive union leaders.

“Even if its 5,000 or 6,000 jobs, they must not be lost,” said Simon Hlongwane, a winch operator and the branch secretary of the Association of Mineworkers and Construction Union, or AMCU, at the Amplats Thembelani mine. “Where will 6,000 in this economy go? They will engage in criminality.”

Already, tensions are high in a region struck by violence last year after a turf war between the AMCU and the larger National Union of Mineworkers killed more than 50 people.

The melee prompted illegal strikes, and Amplats’ production took a hit, part of the reason the company suffered its first losses, from which executives hoped the layoffs could help recover, Reuters said.

But the multinational can expect little help from President Jacob Zuma’s administration.

Unemployment is endemic in South Africa, at more than 25 percent, and elections are due next year, prompting the ruling African National Congress to take a strong stance in negotiations with Amplats.