Mining giant Glencore PLC may slash jobs at its Rustenburg ferrochrome joint venture with Merafe Resources Ltd. in South Africa due to financial losses, Business Day and Mining Weekly reported. Jan. 17, citing a Glencore notice to employees at the site.
The decision was reportedly prompted by South Africa's electricity issues and tariff increases as well as a difficult trading environment that has led to significant volumes of ferrochrome production being transferred to lower-cost competitors abroad.
"Despite significant investment to make the operation more competitive, the Rustenburg smelter has suffered material financial losses, which are expected to continue for the foreseeable future," Glencore was quoted as saying by the news outlets.
Glencore reportedly issued a retrenchment notice to employees, although the company did not provide further details. The facility employs 619 permanent workers and 46 fixed-term workers.
Merafe holds a 20.5% stake in the venture, and Glencore owns the rest. The 430,000-tonne-per-annum smelter is reportedly one of the world's largest producers of ferrochrome, which is used in making stainless steel.
In a same-day news release, Merafe announced that its board proposed to restructure the group, which will allow the company to hold direct, full ownership of Merafe Ferrochrome and Mining Pty. Ltd.
Merafe owns a 100% indirect interest in Merafe Ferrochrome through Merafe Chrome and Alloys Pty. Ltd., which does not conduct any business. Merafe Chrome's main purpose is to serve as a conduit through which Merafe receives its dividends from the venture.
Merafe said the restructuring, expected by Jan. 24, will make the flow of funds more efficient.