Amplats hit hard by South Africa’s mining strikes, down to an annual loss
Anglo American Platinum (Amplats), the world’s top platinum producer, announced Monday an operating loss of $715 million in 2012 as it counted the cost of two months of wildcat strikes at its South African operations.
The loss by the company, which is 80% owned by Anglo American (LON:AAL), comes after a 2011 profit of more than $1 billion, highlighting the grim financial situation it currently faces.
In mid-January, the miner announced plans to possibly close some of its operations and lay off as many as 14,000 workers, sparking worries about a downturn in an industry that's one of the main economic drivers in Africa's top economy.
Amplats said it lost production of some 305,600 ounces of platinum during the strikes, which it described as an "illegal industrial action."
"While we are not pleased with the operational and financial performance, it is important to put things in context," Amplats CEO Chris Griffiths said in a statement. "Operationally, 2012 was a challenging year for Anglo American Platinum and the platinum industry as a whole."
In a separate release Monday, Anglo American announced it would take a $225 million loss from its stake in Amplats.
In November 2012, Statistics South Africa showed what high a price the country’s economy has paid since August last year, when police shot and killed 34 protesters outside Lonmin's (LON:JSE) Marikana platinum mine, northwest of Johannesburg.
Mining output dropped 8.3% on the year in September. The annual fall, the biggest in five months, was sharper than the 4.5% economists had forecasted as strikes crippled the industry, which accounts for 6% of the country’s gross domestic product.
The country’s platinum, gold and coal miners are due to hold two-yearly wage negotiations later this year in a tense climate as the strikes of 2012 showed how fragile labour relations in South Africa are.