(FinancialPress) — Atlatsa Resources has taken action on its stated intention to shut down its operations in the Limpopo province of South Africa. The Bokoni platinum mine is set for closure.
The closure is part of a deal reached with joint venture partner Anglo American Platinum (Amplats) aimed towards debt cancellation and restructuring. Amplats is the world leader in platinum group metals mining.
In July, Atlatsa stated as follows in an investor letter:
“In the circumstances, the Bokoni joint venture partners are no longer able to continue funding losses at the mine with no reasonable short to medium term turnaround prospects,”
Last week, SABC News reported that over 400 workers of the Bokoni mine have been let go. This would be the first wave of terminations that has another 2,000 workers on deck, as operations are set to be brought to a full stop ASAP. Employees will receive a severance package of two-and-a-half-week‘s pay for each year of service provided to the company, as per a National Union of Mineworkers spokesman
Over a 3-year turnaround program, Bokoni laid off 6,000 workers, stopped expansion plans and open pit operations
The Atlatsa/Amplats consists of the latter writing off C$400m in debt,along with acquiring mining rights for Bokoni and two adjacent exploration blocks.
Amplats warned investors of a possible drop of up to two-thirds of its half-year profits due to lower sales, impairments and a strengthened South African currency.
Over the course of 2016, the Bokoni mine produced 159,241 ounces 4E PGM, down from 190,740 4E PGM produced in 2015.
Labour disputes, rising costs and low prices have brought about a climate of heavy pressure to the South African mining sector. The situation was worsened by the introduction and, shortly thereafter, suspension of a new mining charger in July.