• Dangerous games

    Employers' body Neasa is playing a potentially dangerous game, says Terry Bell.

  • Rational thinking

    All players should first consider the net result of their actions, says Leopold Scholtz.

  • Telkom's property poser

    BEE may be hindering Telkom's plans to offload redundant real estate, says Gugu Lourie.

Data provided by iNet BFA
Loading...
See More

Implats: Violent strikes could spread

Aug 23 2012 12:05 Reuters

Company Data

Lonmin plc [JSE:LON]

Last traded 41.61
Change -0.9
% Change -0.02
Cumulative volume 278994
Market cap 23.66bn

Last Updated: 31/07/2014 at 10:52. Prices are delayed by 15 minutes. Source: McGregor BFA

IMPALA PLATINUM HOLDINGS LIMITED [JSE:IMP]

Last traded 108.87
Change -0.63
% Change -0.01
Cumulative volume 102460
Market cap 68.83bn

Last Updated: 31/07/2014 at 11:04. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Implats knocked by strike costs

Implats halts output to mourn miners

Lonmin: Minister soothes foreign fears

Toe the line or else, Zuma warns mining firms

Company: Lonmin talks 'cordial'

Labour minister meets with Amcu

 

Johannesburg - World No.2 platinum producer Impala Platinum Holdings [JSE:IMP] has warned that industrial action at South Africa's platinum mines, resulting in the death of workers at Implats and its rival Lonmin [JSE:LON], could become more widespread.

A violent six-week strike at Implats' Rustenburg operations early this year sliced 21% off its full-year production and, combined with declining metals prices, led to a drastic cut in its dividend, to 60 cents a share from 570 cents last year.

“The platinum industry is experiencing increased levels of industrial action, as witnessed at both Impala Rustenburg at the beginning of this year and more recently at Lonmin, with the associated tragic loss of life. These developments pose a significant risk to the industry,” said Implats’ newly installed chief executive Terence Goodlace.

Describing the labour relations at Implats’ operations as “relatively stable”, Goodlace said the trade union rivalry that sparked the strike at both its operations and Lonmin’s was still “fairly volatile”.

A bitter turf war between the entrenched majority National Union of Mineworkers (Num) and rival Association of Mineworkers and Construction Union (Amcu) has already spilled over to surrounding mines in the Rustenburg area and analysts are worried about a contagion hitting gold producers.

The platinum price has also jumped to a three-month high on the threat that South Africa, as supplier of 80% of the world’s platinum, could be disrupted indefinitely.

Three lives were claimed during the strike at Implats in January and February. This cost the company, which produces 30% of the world’s platinum, 120,000 ounces in lost production and translated into R2.8bn in lost revenue.

Challenges mount

“We are trying to restore production levels. We were hurt by the strike, and the build-up thus far to pre-strike levels has been a lot slower than anticipated,” Goodlace said.

Production for the 2012 financial year came in at 1.45 million ounces and Implats is now unlikely to hit its 2014 target of 2 million ounces.

South Africa’s platinum industry is struggling to survive as input costs, such as electricity and labour, climb and the platinum price falls.

The flaring labour unrest and concerns over South Africa's declining supply has provided some respite for the metal’s price, which has climbed by about $150 in the past week.

Implats still has a way to go to reassure investors. Apart from labour concerns, it must still finalise the sale of a 31% stake in its Zimplats operations to the Zimbabwean government.

Chief financial officer Brenda Berlin told a media conference call that discussions were centred on the value and funding of the stake. She said that other buyers would be engaged only if the funding was not secured by the Zimbabwean government.


* Follow Fin24 on Facebook, Twitter and Google+.

 
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
4 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

Go solar and save

Households may have to examine alternative forms of energy after Eskom has been given permission to raise electricity prices above the 8% previously granted.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...