Johannesburg - Anglo Platinum [JSE:AMS] (Amplats), the world's largest
producer of the precious metal, swung to a hefty full-year loss, demonstrating
the depth of the crisis at its South African operations.
The platinum miner, which is 80%-owned by resources giant
Anglo American [JSE:AGL], plans to lay off up to 14 000 people as it closes two
mines and sells another in a last-ditch attempt to return to profitability.
The company posted a headline loss per share of 562 cents a
share on Monday for the year to end-December, way off the profit of 1,365 cents
reported in the previous year.
Wrestling soaring input costs and suppressed platinum
prices, Amplats was pushed over the edge by a two-month illegal strike at its
operations in Rustenburg.
Labour strife since September resulted in a loss of 306,000
ounces of platinum, reducing full year output by 8% to 2.2 million ounces with
refined production of 2.4 million ounces 4% lower.
The company's plans to cut output by almost a fifth - or
400,000 ounces a year - helped push platinum prices higher last month but
vociferous union and government objections to the accompanying mass job cuts
have threatened the restructuring.
The company has since agreed to delay the required 60-day
consultation process by two weeks to allow the parties to seek alternative
"The proposed portfolio review recommendations continue
to require extensive consultation with government, organised labour and other
stakeholders prior to implementation," said chief executive Chris
Griffith, who made no mention of backtracking.
Analysts have said going back on its plans would unsettle
investors more than the potential risk of further industrial strife.
Violent illegal strikes in the platinum and gold industry
claimed the lives of more than 50 people last year, including 34 striking
miners shot dead by police.
"Amplats can't now backtrack. They have to do
something," said Justin Froneman, a platinum analyst for SBG Securities in
The company has cut its production target to between 2.1 and
2.3 million ounces a year and has slashed capital expenditure by R11bn for the
next decade by 25% to R100bn.
Shares in Amplats have shed 21% of their value in the past
year, compared to the JSE's platinum index, which has only dropped 9.25%.
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