JOHANNESBURG (miningweekly.com) – The controversial redundancy talks of Anglo American Platinum (Amplats) have advanced from the hostility of outright union rejection to discussion on voluntary separation and early retirement.

Amplats CEO Chris Griffith said on Monday, after announcing results that were cushioned by a weaker rand and increased sales volumes, that the company had been able to bring home to the unions the message of the industry’s difficulty.

Following prolonged bilateral consultations with the Department of Mineral Resources (DMR) over its contentious restructuring plan, Amplats in May reduced its original jobs-cut level from 14 000 to 6 000.

The review of the company’s business, announced in January, was in response to downwardly revised expectations for platinum demand growth and several structural changes that had eroded profitability in recent years.

“The last couple of weeks have been much more constructive in that we’re now engaging on the terms of voluntary separation and early retirements and what redeployments will look like,” said Griffith.

The discussion had moved on from utter rejection of the proposals and push back on the reasons for the restructure, to details about severance packages.

Currently, it was only Amplats’ opencast Mogalakwena mine in Limpopo, which continued to do exceedingly well, and Amandelbult underground mine in the North West that were generating free cash flow – although, when stay-in-business capital was excluded, this only applied to Amandelbult.

Rustenburg Platinum had haemorrhaged R1-billion cash out of the business and the Union mine, which was to be sold, and had seen R350-million in cash flow out of the business, which confirmed the need to continue with the process of review.

The loss in production as a result of intermittent illegal work stoppages totalled 20 000 oz from Amplats' mines and 3 000 oz from a bus strike, with another 30 000 oz being lost as a result of inability to redeploy personnel.

Liberum Capital reports from London that Amplats is raising its cost guidance for the year from R16 500/oz to R17 000/oz.

Liberum sets August 10 as the day Amplats hopes to conclude restructuring consultations with the unions.

Amplats, it says, is still looking to cut 250 000 oz of current production while keeping retrenchments as an "absolute last resort".

Running parallel are the complete wage negotiations.

As far as the next six months were concerned, Griffith told Mining Weekly Online that higher demand could be expected at the weak price levels.

He believed that supply disruption was likely to tighten the market.

But business would continue to be tough from an overall mining viewpoint as restructuring entered the implementation phase.

The review was expected to deliver savings of R3.8-billion a year by 2015.