(Reuters) – Zimplats will reduce its headcount by 1% as it implements broad cost cuts to survive a sharp fall in platinum group metal (PGM) prices, CEO Alex Mhembere said on Wednesday.
Zimbabwe’s biggest platinum producer announced in March it was offering voluntary job cuts in an attempt to contain costs amid declining revenues.
Southern African PGM miners, including Zimplats’ parent company Impala Platinum, Sibanye Stillwater and Anglo American Platinum have scrambled to cut costs, and thousands of jobs, after profits slumped as metal prices plunged over the past year due to weak auto production and concerns about a global economic slowdown.
“Through these current headwinds, we are only going to reduce our people by 1% of the total labour complement of 8,000 people that we have,” Mhembere told a PGM mining conference in Johannesburg.
Job cuts were “not the only lever that can sustain the business”, he said.
The company wants to maintain its annual output around 600,000 PGM ounces per year and was targeting improving productivity as a way of containing costs, Mhembere added.
He said Zimplats was curtailing spending under its 10-year $1.8 billion expansion project announced in 2021 and would be “capital light” in its next financial year, which starts in July.
“We’re going to spend less. We will only be focusing on our replacement capital expenditure, stay-in-business capex and very little on growth capex,” Mhembere said.
Some of the projects Zimplats is deferring include sulphur abatement and the second phase of a solar power plant.
Mhembere said Zimplats did not see any potential adverse impact of Zimbabwe’s new gold-backed currency, introduced last week to replace an inflation-ravaged Zimbabwe dollar, on its business.
“It is not a threat to us. We operate in United States dollars. This is a local currency and it will not affect our business,” he said.
(Reporting by Nelson Banya; Editing by Emelia Sithole-Matarise)
