Tensions high as Amplats to unveil South Africa job cuts plan – by Ed Stoddart (Reuters U.S. – May 9, 2013)

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(Reuters) – Anglo American’s (AAL.L) platinum arm, under pressure from South Africa’s government, could announce a restructuring plan on Thursday or Friday that will sharply scale back job losses as it tries to balance out cost cuts and the threat of labor unrest.

Anglo American Platinum (AMSJ.J) had planned to slash 14,000 jobs and mothball two mines to return to profit but industry sources have told Reuters that the final plan would be pared back, with as few as 5,000 jobs cut.

Militant workers have signaled they will launch protest strikes even if the job cuts fall far short of the initial target. Social tensions are running high after violence rooted in a labor turf war killed more than 50 people last year and sparked illegal strikes that hit production.

For Amplats, reining in costs and cutting production to such an extent that it lifts the price of platinum, used for emissions-capping catalytic converters in automobiles, is absolutely crucial after it fell into a loss last year.

“From the point of view of Amplats itself, both numbers will be critical, how many ounces will you produce, but also how many people, because that impacts on the cost base,” said Alison Turner, an analyst at Panmure Gordon.

It is also vital for Anglo American as it tries to turn around at a time when commodity prices are starting to slump.

Militant labor leaders, who closed mines in protest around the platinum belt city of Rustenburg for a day in January when the plans were first unveiled, have said even a scaled back proposal to cut 5,000 or so jobs would be unacceptable.

“Obviously, we will not allow this to happen. If they close one operation, we have vowed among ourselves that all of these operations must stop,” Evans Ramokga, an Amplats miner and activist associated with the militant Association of Mineworkers and Construction Union (AMCU), told Reuters by phone.

But AMCU leaders said in Johannesburg they would not endorse any illegal protest actions or strikes.

“We are not supporting anything like that. AMCU does not vouch for unprotected (illegal) industrial action,” AMCU president Joseph Mathunjwa said.

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