Johannesburg — AFRICAN Rainbow Minerals ' (ARM's) subsidiary Assmang and BHP Billiton on Monday announced retrenchments at their ferromanganese operations.
Global mining giant BHP Billiton said it had informed trade union Solidarity it planned to retrench about 15% of the employees at Hotazel Manganese Mines.
BHP Billiton's share price fell 3,6% on the JSE to R190,63 on Monday, while Anglo American 's share price fell 2,4% to R223 per share. The share price of Assore , which owns the other half of Assmang, was unchanged at R50.
Analysts said the retrenchments at Assmang was not likely to have been the reason for the more marked decline in ARM's share price, as the plan to retrench had been communicated to analysts three weeks ago.
A possible factor for the weakness of ARM's share price was the continued strength of the rand, which would hurt the profitability of ARM's businesses, and hence its share price, more than globally diversified miners like BHP Billiton and Anglo American, which trade in many currencies
An analyst described the ferrochrome and ferromanganese markets as "pretty bleak", with ARM's ferrochrome furnaces running at about 20% of capacity and its ferromanganese production at between 30%-40% of capacity.
Assmang spokesman Jan Steenkamp on Monday said the firm intended cutting 180 jobs at its Cato Ridge operations. Between 20 and 40 jobs would be axed at Assmang's Machadodorp unit.
He could not give an exact number for Machadodorp as it was hoped that some workers retrenched there could be employed elsewhere in the group.
The company had just started negotiations regarding retrenchments at Black Rock mine, so Steenkamp could not give a number for potential job cuts there. The retrenchments have been blamed on the decrease in metals prices and the general downturn in the economy. Steenkamp said the 12 months ahead would be difficult, but there was confidence in the long term.
The retrenchments come after a decision to close furnaces 5, 4 and 3 in April due to poor market conditions. Assmang's high carbon ferromanganese furnaces have a production capacity of about 55000 tons a year.
An analyst said the manganese ore price seemed to be close to, or at its lowest point, at 3 per metric ton unit, but the global steel market, the main driver of manganese demand, had not yet recovered. He expected manganese producers would be operating at low capacity for most of this year at least.
The company had told analysts three weeks ago that it may retrench about 25% of its workforce in the manganese operations, estimated to be 500 employees.
