Amplats fuels strike fears after it cuts 14,000 jobs in South Africa

Anglo American Platinum risked triggering a repeat of last year's violent strikes in the South African mining industry today as it announced plans to mothball two mines and sell another, with the loss of 14,000 jobs.

The City's fear of further disruption was so great that shares of Anglo American, which owns 80 per cent of Amplats, tumbled nearly 4 per cent, even though it approved of the plans.

The scale of the cuts, which represent nearly a quarter of Amplats' 60,000 permanent and contract staff and 3 per cent of South Africa's total mining workforce, was far more severe than the City had expected.

"If they put any shaft on care and maintenance, all of the operations will go on strike. Nothing like this will be allowed," said Evans Ramogka, an union labour leader in Rustenburg, where the Khuseleka and Khomanani mines will be mothballed.

Frans Baleni, the general secretary of the National Union of Mineworkers, added: "As the NUM we are extremely disturbed by these job losses and we are asking workers to be united to defend their jobs."

Chris Griffith, the chief executive of Amplats, scrambled to defuse the situation today, acknowledging the threat of strikes and pledging to create thousands of new jobs. "There is a possibility of further strikes but we are urging unions to take up consultation. We are keen to show this is not a reprisal against the strikes last year," he said.

Activists brought many of South Africa's platinum and gold mines to a standstill last year in a wave of violent wildcat strikes that resulted in more than 40 deaths. The unrest was rooted in a union turf war which aggravated existing discontent among many miners who wanted higher wages for their dangerous work.

Those strikes put further pressure on Amplats, which was already suffering from a weak platinum price resulting from an oversupply of the precious metal. Platinum today climbed to a three-month high of $1,699.5 an ounce on news of Amplats' move, which will cut output by about 400,000 ounces a year.

Last year's strike cut Amplats' production by 306,000 ounces and pushed it into the red for 2012.

Anglo American's shares fell by 75.5p to 1,961p.