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Amplats: Mining in financial distress

Nov 02 2012 07:58 Reuters
Amplats worker

Amplats worker (Picture: AFP)

Company Data

ANGLOGOLD ASHANTI LIMITED [JSE:ANG]

Last traded 0
Change -1,1
% Change 0
Cumulative volume 2886928
Market cap 38.30bn

Last Updated: 31-10-2014 at 04:29. Prices are delayed by 15 minutes. Source: McGregor BFA

GOLD FIELDS LIMITED [JSE:GFI]

Last traded 0
Change -1,48
% Change 0
Cumulative volume 2986543
Market cap 28.70bn

Last Updated: 31-10-2014 at 04:29. Prices are delayed by 15 minutes. Source: McGregor BFA

Anglo American Plat Ltd [JSE:AMS]

Last traded 0
Change -7,25
% Change 0
Cumulative volume 265041
Market cap 93.04bn

Last Updated: 31-10-2014 at 04:29. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - South Africa's platinum industry is in "severe financial distress" and high wage settlements to get wildcat strikers back to work will lead to job cuts, Anglo Platinum [JSE:AMS] said.

The world's top platinum producer said it was losing production averaging 3 694 ounces of platinum per day due to a strike at its South African operations that is in its seventh week. To date 141 640 oz of the precious metal have been lost.

"This is completely the wrong time to be offering unsustainable wage increases that the moment people are back at work you just have to (lay off) a whole lot of people," the firm's chief executive Chris Griffith told Talk Radio 702 On Thursday.

"There will be implications for jobs," he said adding that Amplats could not "negotiate in a climate of anarchy".

Amplats' parent company Anglo American [JSE:AGL] has already placed its four Rustenburg mines "under review" - management-speak for their possible closure.

Layoffs in the mining industry were a prime factor behind a rise in unemployment in the third quarter that left more than one in four of the labour force out of work.

Months of unrest in the mines have hit platinum and gold output, threatened growth and drawn criticism of President Jacob Zuma for his handling of the most damaging strikes since the end of apartheid in 1994.

But the number of strikes has dropped in the last two weeks amid management threats of mass dismissals and some payment sweeteners.

Amplats said last week it had reached a deal with several unions and would be offering incentives such as one-off hardship payments of R2 000 to end the strike that has crippled production.

But the workers turned down the offer, saying Amplats should match a salary increase of up to 22% offered by rival Lonmin after a violent wildcat walkout at its nearby Marikana platinum mine in August.

The Lonmin offer came after the police killing of 34 miners on August 16, the bloodiest security incident since apartheid.

Lonmin, the world's third-largest platinum producer, is scrambling to get back on its feet after the violent six-week strike that crippled production and led it to ask shareholders for $800m in a rights issue on Tuesday.

The company also gave unions notice of a restructuring, with proposed job losses in its 25 000-strong work force expected to be implemented in early 2013.

Striking workers at gold firms including AngloGold Ashanti [JSE:ANG] and Gold Fields [JSE:GFI] returned to work last week after threats of mass dismissals and an offer of a small pay increase.

 
anglo platinum  |  mining unrest
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