Mining company African Rainbow Minerals (ARM) may cut jobs and investments at its Black Rock Manganese mine located in the north of South Africa, citing weak metal prices that resulted in a 56% decline in first-half earnings.
The company’s latest decision is aimed at saving cash in order to cope with prices of weaker iron ore and platinum.
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ARM chief executive Mike Schmidt told analysts and investors at a results briefing that the decision will see redeployment of employees and possible reduction of the workforce, Reuters reported.
The Black Rock Manganese Mine is jointly managed by ARM and its partner Assore.
ARM did not reveal the number of jobs that would be affected.
In its interim result the company said: “The Black Rock Project currently underway is aimed at modernising the Black Rock Mine and increasing production from the Seam 2 resource.
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By GlobalData“The project is expected to curtail cost increases, bringing them in-line with inflation.
“Establishment of key underground and surface infrastructure, being undertaken as part of the project, is expected to eliminate the need for inefficient material handling and ultimately enable the saleable production capacity of Black Rock Mine to be increased.”
According to the National Union of Mineworkers, 375 jobs could be affected and it would protest against the planned retrenchments at the offices.
In February, the mining company divested its stake in a chrome mine to Assore.
The life of ARM’s Two Rivers platinum mine, which is run with Impala Platinum, has been extended and is said to be in-line with the company’s strategy of reducing its dependence on iron ore and manganese.
As noted by ARM, the losses were mitigated by the weaker rand currency compared with the dollar.
In 2014, the iron ore price nearly halved and hit a record low below $60 a tonne last week owing to oversupply concerns as well as growth worries in China.
The company has also announced to stop the operating furnace at Machadodorp from April 2015 and put it under care and maintenance following a review of its manganese alloy smelter.
Image: ARM has extended the life of its Two Rivers platinum mine. Photo: courtesy of African Rainbow Minerals.
