Samancor Plans Job Cuts Amid Lower Power Costs, Union Warns of Labor Tensions

Samancor has announced plans to cut approximately 15% of its workforce, equivalent to around 450 positions, as part of a restructuring initiative. This decision comes even as the average power price for industrial users in South Africa dropped by 8.3% in the first quarter of 2026, according to national grid operator Eskom’s quarterly report. The company cited persistent inefficiencies and rising operational costs beyond energy, including maintenance and logistics, as key drivers behind the move. Despite reduced electricity tariffs, which now average ZAR 1.85 per kWh for high-demand industrial consumers—down from ZAR 2.02 in early 2025—the cost of power remains a structural burden. Samancor’s operating margins in the mining segment narrowed to 12.4% in Q1 2026, down from 16.1% a year earlier, underscoring continued financial strain. The union, the National Union of Mineworkers (NUM), has condemned the job cuts, citing a lack of consultation and warning of potential industrial action. The move affects primarily labor-intensive operations at the company’s platinum group metals (PGM) processing plants in Rustenburg and northern Gauteng. These operations contribute significantly to South Africa’s PGM exports, which account for over 70% of global supply. The announcement has triggered a 3.8% decline in SAMD.JO shares and a 2.1% drop in PLJ.JO, a key player in the mining services sector. The ZAR=X currency has weakened by 1.5% against the USD over the past week, reflecting investor concerns over labor instability and sector-wide profitability in the commodities market.