Unki hits new production record, but plans for group-wide job cuts cast dark cloud

Unki's US$62m concentrator has increased output

The good news is that Unki Mine hit a new production record in 2023. The bad news is that the company’s holding company, Anglo American Platinum (Amplats), plans to cut 3,700 jobs across its businesses as low platinum prices bite.

Unki’s total platinum group metal (PGM) production rose by 5% to 243,800 ounces, benefiting from an investment that increased output from its new US$62 million concentrator plant. This beat the 232,000 ounces in 2022, setting a new record for Unki.

The mine’s USD-operating costs rose by 9% to US$183 million, as a result of higher costs of inputs such as explosives and chemicals, and the sharp rise in power charges. In rand terms, Unki’s earnings fell by 51% to R2.1 billion. Despite the increase, Unki’s costs are stable and manageable, the company says. This means Unki will not face severe job cuts.

Unki was one of the bright spots for the Amplats group. The company’s increased output offset the decline in production from other operations. Unki has also advanced plans to set up a 35MW solar plant for the mine.

However, falling prices, down 35% last year, are affecting the group. That, combined with rising costs around the world, resulted in Amplats’ profit falling by 71%. The company cut costs last year, but this was not enough, Amplats CEO Craig Miller said Monday. The company now has to cut as many as 3,700 jobs – 17% of the group’s workforce – and review contracts with 620 service providers.

Says Miller: “Given the market outlook and protracted low-price environment due to structural changes in our markets further measures are required to build the resilience that will sustain this business.”

The job cuts at Unki will not be as severe as in South Africa. They will be “in the tens, and not hundreds”, Amplats executives say.

Implats, which owns Zimbabwe’s largest producer Zimplats, recently suspended some of its expansion projects due to weak platinum prices. This includes some projects under the US$1.8 billion investment plan in Zimbabwe. The low prices have also forced Tharisa to postpone the development of a new mine in Zimbabwe, Karo, which would be the country’s third-largest platinum producer.

The drop in earnings from minerals, the country’s biggest foreign currency earner, will slow down Zimbabwe’s economic growth this year and cut inflows of USD into the country.

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