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S. Africa chrome producers shedding jobs in dire market

Keywords: Tags  chrome, ferrochrome, Xstrata Alloys, International Ferro Metals, IFM, Hernic Ferrochrome, JIC Mining, strike National Union of Metalworkers of South Africa

JOHANNESBURG — South African chrome companies were hit by job cuts last week at Xstrata Alloys and JIC Mining Services Ltd.

Rustenberg, South Africa-based Xstrata Alloys on Nov. 2 said it dismissed 400 workers who were on an illegal strike at its Rustenburg Mine.

Earlier the same day, the trade union Solidarity said that Randjespark, South Africa-based chrome mine contractor JIC Mining Services Ltd. was planning to lay off more than 800 employees working at the South African operations of Hernic Ferrochrome Pty. Ltd. and International Ferro Metals Ltd. (IFM). The workers at Brits, South Africa-based Hernic would be furloughed by the end of November, with those at IFM, near Marikana, to come when their contract comes to an end.

The dismissals are due to different circumstances, but both companies have indicated that a depressed market has been a factor.

Between 20 and 30 percent of the roughly 690 workers at the Rustenburg Mine appealed their dismissals within the prescribed 24 hours of receiving the notice, an Xstrata Alloys spokesman told AMM sister publication Metal Bulletin Tuesday.

"We are reviewing the appeals, each on its merit, and will take things from there," he said. "The mine is operating at very minimal levels, which is also having an impact on the rest of the alloys business, including the smelters. We need at least about half of our employees to work the mine."

However, Xstrata might not replace all of the employees not returning to work because the chrome market is so depressed, he said.

"We will have to assess the need to replace them," the spokesman said, adding that the National Union of Metalworkers of South Africa (Numsa) has indicated that it wants to file a blanket appeal on behalf of all their dismissed members.

The Hernic dismissals came about when the ferrochrome producer changed its contract terms to "tonnes hoisted" from "inventive payment," JIC Mining said. This is a way for Hernic to save money in a tough market environment, while Sydney-based IFM’s contract is ending.

"Ferrochrome output is running at very reduced levels at all producers, and the chrome ore market is not looking that great either," one analyst said. "In tough markets, many mines move outsourced services in-house to save money."

A version of this article was first published by AMM sister publication Metal Bulletin.

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