Amplats expects severely lower profits after five-month strike

Amplats expects severely lower profits after five-month strike

Anglo American Platinum (Amplats), the world’s No.1 producer of the precious metal, has warned its earnings for the first half of the year could be virtually wiped out after a crippling five-month strike in South Africa that disrupted mining.

The company said in a statement it expected its headline earnings per share for the six months to the end of June to fall up to 96%, compared to the same period last year.

The decrease “is primarily due to the impact of the five-month industrial action, which impacted on operational performance,” it said.

Recent figures from Statistics South Africa show how much the sector suffered with the labour stoppage, the longest and costliest strike in the history of South African mining.

Platinum miners said they lost a combined total of more than $2bn in revenue. The country’s economy shrank 0.6% in the first quarter from a year earlier, the first quarterly contraction since 2009.

The precious metal output in May dropped 48.5% compared to the same month of last year and. South Africa’s platinum mining production has steadily declined since February this year, with March’s numbers also down strongly on last year at -44.7%.

Spot platinum was last at $1,493 per ounce, down $19.50 on Monday’s closing level, while palladium at $868 was down $6.

South Africa, Africa’s largest economy, holds about 80% of the world’s known platinum reserves, accounting for about 70% of global output.

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