[miningmx.com] — EXXARO Resources said on Tuesday up to 300 of its 10,500 workforce faced being retrenched in an effort to reduce costs and improve productivity at the diversified mining group.
The group’s executive general manager for human resources, Retha Piater, said all Exxaro’s business units, with the exception of Zincor and Glen Douglas, would be affected.
She cited continued above-inflationary cost increases – including electricity tariffs and wages – as a major contributing factor to the decision, and said the retrenchments would be enacted across all levels.
“This is the culmination of a 18 months process to streamline our organisational structures,’ Piater said.
She said neither the recent two-week strike at Exxaro’s KZN Sands unit, nor the current work outage at the unit due to a furnace burnout, had a direct influence on the decision.
Said CEO Sipho Nkosi: “The future sustainability of the group remains a pressing need in the context of the demanding business environment in which we operate. We must ensure we have a streamlined and competitive current business to meet our growth aspirations.’
The announcement came after the group posted a net increase in half-year operating profitability of 43% to R1.3bn in August, paying an interim dividend of 200c per share to shareholders.
In its outlook for the rest of the year, Exxaro said coal export volumes should increase, while demand for hard coking coal will remain strong and should support an increase in semi-soft coking coal prices.
It did, however, warn that the continued strength of the rand and the Australian dollar against the US currency could affect profitability. At the time, Nkosi said each 10 cent move in the currency would hit the group’s operating profit line by R30m to R40m.
Exxaro also announced in October it is keen to broaden its portfolio to include copper and iron ore.
