20th Jan 2020 07:45
(Alliance News) - Glencore PLC and Merafe Resources Ltd on Monday confirmed the commencement of a consultation process for the Rustenburg ferrochrome smelter in South Africa.
The smelter is part of the Glencore-Merafe chrome venture, in which commodities trader Glencore holds an 80% stake, and chrome producer Merafe the remainder.
The consultation process is being conducted under section 189 and 189a of the Labour Relations Act, which deals with the potential dismissal of one or more employees based on "operational requirements".
Both companies also confirmed that it has issued a written notice to all employees at the smelter.
The consultation process is a result of deteriorating operations and market conditions in the South African ferrochrome industry, including unsustainable electricity tariffs and interruptions, as well as real cost inflation.
These factors have led to the displacement of substantial volumes of ferrochrome production, to lower cost competitors outside of South Africa.
As a result, the Rustenburg Smelter has reported material financial losses, which is expected to continue in the future.
As part of the process, Glencore and Merafe have applied for the appointment of a facilitator from the Commission for Conciliation, Mediation and Arbitration, to assist both companies during the process.
Shares in Baar-based Glencore were down 0.2% at ZAR46.00 in Johannesburg, while Bryanston-based Merafe's shares were 2.5% lower at ZAR0.78 on Monday.
By Dayo Laniyan; [email protected]
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