Impala to Cut Customer Metal Supply to 40% Within Months

Impala Platinum Holdings Ltd. (IMP) said it would cut metal deliveries by as much as 60 percent in three to four months should a 14-week-old pay strike continue to cripple South African mines.

The world’s second-largest producer of the metal met all customer deliveries in April, Impala spokesman Johan Theron said today by phone. The Association of Mineworkers and Construction Union has been on strike at mines of Anglo American Platinum Holdings Ltd. (AMS), Impala and Lonmin Plc (LMI) since Jan. 23.

Impala will have “supply constraints in May,” Theron said. “We’ll continue to prioritize our South African clients.” Stocks of palladium, used for catalytic converters to reduce emissions in vehicles, were the most critical, Theron said. The company would assist customers in obtaining the metal they need should it cut deliveries, he said.

The AMCU has rejected the three producers’ latest offer to increase pay to 12,500 rand ($1,190) a month by 2017 including benefits, instead demanding that amount in base pay. That’s double entry-level workers’ current salaries.

The platinum producers ended talks April 24 and decided to put their latest pay offer directly to workers, using text messages and radio commercials.

Impala expects responses to the offer from employees by the end of this week or early next, Theron said. The company’s Rustenburg Lease Mine accounted for 58 percent of the group’s mined platinum production in the six months ended December. Impala’s other operations aren’t affected.

Lost Wages

The strike by more than 70,000 AMCU members has cost the companies 16.6 billion rand in lost revenue and employees 7.4 billion rand in income, the producers said on a joint website. South Africa accounts for more than two-thirds of the metal’s mined supply.

It was up to the companies to resume talks to bring an end to the strike, AMCU President Joseph Mathunjwa said today by phone.

“They brought their offer and the offer got rejected; it means the strike is still going on,” Mathunjwa said.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net Randall Hackley

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