Jan. 26 (Bloomberg) -- Anglo Platinum Ltd., the miner of about a third of global output of the metal, was lowered to “underweight” from “neutral” by JPMorgan Chase & Co. as a slump in prices left the company “hemorrhaging cash.”

Neville Nicolau, who took over as chief executive officer in June, has a “mountain to climb,” analysts Steve Shepherd and Allan Cooke wrote in a note today. Production may be “at least 500,000 ounces less platinum than we thought it capable of in 2009,” they wrote.

Platinum has dropped 58 percent from a record in March, prompting Lonmin Plc, the third-biggest producer, to cut as many as 6,000 jobs. Anglo Platinum said Dec. 17 it would produce about 2.4 million ounces of the metal this year, compared with a prior estimate by JPMorgan of about 2.9 million ounces.

Nicolau has to fix output and safety problems, and unravel bureaucracy, JPMorgan said in today’s note, adding the company, which is 79 percent owned by Anglo American Plc, may need 11.8 billion rand ($1.15 billion) in funding over the next two years.

“The immediate outlook for platinum group metals appears bleak,” the analysts wrote. “We think this state of affairs may get worse before it gets better.”

Impala Platinum Holdings Ltd., the second-biggest producer, is “looking closely” at output, CEO David Brown said in December. The company, which quit talks this month on taking over Northam Platinum Ltd., will release interim earnings on Feb. 19.

Anglo Platinum gained 21.99 rand, or 5.3 percent, to 434.99 rand in Johannesburg trading. Impala rose 3.75 rand, or 3.2 percent, to 122.25 rand. Platinum, used in jewelry and to make devices that cut pollution from car exhausts, gained 0.6 percent to $964 an ounce in London.

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net;

Last Updated: January 26, 2009 12:40 EST