Anglo Platinum mines halted by massive strike in S. Africa

Anglo American Platinum’s (Amplats) (LON:AAL) South African mines were not producing this morning as less than 20% of employees reported for duty at the firm’s mines near Rustenburg and north of the Pilanesberg in the country’s North West province.

Workers at the world's top platinum producer announced the labour action two days ago, as they want Amplats to reconsider its decision to fire 3,300 miners.

SAPA news agency reports that non-striking workers have been target intimidation, although no serious incidents have been reported.

The company, which supplies 40% of the world’s platinum demand, plans to consolidate five of its South African mines with nine shaft systems into three operating mines and reduce annual production by 350,000 ounces.

The miner has said it is not making enough money at those operations, due to mounting electricity and labour costs, as well as weaker prices. South Africa's Chamber of Mines estimates that at least half of the country's gold and platinum mines are losing money or barely breaking even.

“The company is under tremendous economic pressure,” said Friday Chief Executive Officer, Chris Griffith, in a statement. “Strikes and work stoppages will result in further losses that will hamper plans for future sustainability and further threaten the future of our 45,000 employees."

He added the company’s processing unit hasn’t been affected yet.

Earlier this year, Amplats lost almost 4,000 ounces of platinum production in only one day due a 24-hour strike.

But job cuts are a delicate subject in South Africa, where the unemployment rate is more than 25% and violent antagonism between main the mining industry’s labour unions has killed dozens of people over the past 18 months.