Anglo Platinum, the world's number one platinum producer, suffered more than 80 safety-related work stoppages including 12 fatalities, that resulted in lower output and a drop in profits of over 60% in 2011.
Profits at the South African miner, which accounts for some 40% of global output, fell to $463 million last year and the company warned that 2012 will also be difficult.
The Wall Street Journal reports:
Anglo Platinum said 2012 will be a "challenging" year, with persistent market volatility denting sentiment for metals like platinum. It also said it expects safety stoppages imposed on miners by South Africa's department of minerals will continue to rise and that power shortages could cause more disruptions to work.
Refined platinum output was down 2% at 2.53 million ounces and the company scaled back its previous target of 2.7 million ounces for this year saying production would be flat in 2012. Anglo Platinum is also cutting capex by 11% to roughly $1 billion.
Liberum analyst Dominic O'Kane said Anglo Platinum lowering 2012 output plans will be good for the market, where demand is struggling.
“Anglo American Platinum expects the platinum market to remain in balance in 2012 due to continued strengthening of autocatalyst demand, resilient jewellery markets and continued investor interest.”
Platinum was changing hands at $1,657.40 an ounce in Monday afternoon trade in New York, down slightly from Friday's close. The precious metal is up 20% from lows of $1,375/oz struck at the end of last year.
MINING.com reported last week South Africa’s ruling party, the African National Congress, appears to be moving away from nationalization of the mining industry to reassure foreign investors but is considering other plans to increase state involvement in the sector, particularly with regard to platinum.
According to the ANC study platinum is considered a strategic mineral and would be nationalized via “targeted interventions” with the government participating in the industry to a much greater extent.
One study puts the value of South Africa's platinum reserves is put at $2.3 trillion.