Bushveld gives notice to 40pc of head office staff

13th Dec 2023 14:18

(Sharecast News) - Vanadium producer Bushveld Minerals said in an update on Wednesday that it was implementing strategic cost-cutting measures to ensure long-term competitiveness and financial stability, while also right-sizing its head office staff to align with a renewed focus on core operational assets.

The AIM-traded firm said notices had been issued to impacted group head office employees in accordance with South Africa's Labour Relations Act.

It said the decision was driven by both global market conditions and the company's recent shift towards focusing on core operating assets, such as Vametco and Vanchem, while divesting other assets, including downstream energy assets and the Mokopane development project.

About 40% of head office positions would be affected, with an expected annual saving of approximately $1.5m.

Bushveld said the well-being of its employees was a priority, with the process to be conducted "transparently and in line with the company's values".

It said the measures were essential to navigate current market conditions and ensure the company's competitiveness throughout the commodity cycle.

On the operational front, Bushveld said it was on track to meet its 2023 group production forecast of 3,700 to 3,900 mtV.

However, due to repeated refractory failures at Vanchem in December, it had decided to advance the 2024 kiln reline program by 12 days, impacting Vanchem's production for December the month.

"Over the past months, Bushveld Minerals has initiated several cost-saving initiatives, including a strategic ore sourcing programme and a moratorium on recruitment across the business," said chief executive officer Craig Coltman.

"The challenges posed by global market conditions and the need for sustained operational stability have compelled us to take further strategic measures, including a reduction in our group head office staff."

Coltman said the company's priority remained the safety and wellbeing of its employees, adding that it was committed to supporting them through the process.

"As we navigate these challenges, we are confident that these measures will fortify Bushveld Minerals for long-term resilience and continued success in the dynamic commodity landscape."

At 1354 GMT, shares in Bushveld Minerals were down 6.3% at 2.16p.

Reporting by Josh White for Sharecast.com.