Fin24

Strike woes weigh on Anglo

2012-10-03 15:33

London - Shares in miner Anglo American [JSE:AGL] dropped more than 2% on the FTSE here as wildcat strikes in South Africa’s mines spread to iron ore, with some 300 workers at the mining group’s Kumba Iron Ore [JSE:KIO] subsidiary downing tools.

Anglo, which gets roughly half its group-level profit from Kumba, is already battling labour trouble at mines owned by its platinum arm, Anglo Platinum [JSE:AMS] (Amplats). Worker attendance at Amplats’ Rustenburg mines has fallen to below 20%.

“An extended disruption at Kumba is clearly negative for Anglo American, particularly on top of the Anglo Platinum issues and lower production from the copper unit,” Goldman Sachs analysts write in a research note.

Shares in Anglo, down 10% since strikes began in August, are down just over 2% at 1 837 pence at 14:50, underperforming a flat UK mining sector and a 0.1% rise in the FTSE.

As many as 75 000 miners, or 15% of the South African mining sector’s total workforce, are already on strike.

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