Anglo American Platinum Ltd., the largest producer of the metal, rose to the highest in more than a year in Johannesburg as some investors took the view it’s better placed than rivals to weather an eight-week mine strike.
Amplats, as the company is known, advanced 5.3 percent to 475.79 rand by the close, the highest since Feb. 11, 2013. The volume of shares traded was more than double the daily average for the past 90 days. Amplats has climbed 17 percent since the Association of Mineworkers and Construction Union, the largest among its workers, said Jan. 20 it would go on strike.
Talks to end the strike at Amplats, Impala Platinum Holdings Ltd. and Lonmin Plc in support of the union’s demand for entry level pay to be more than doubled to 12,500 rand ($1,167) a month are deadlocked. The companies rejected a compromise by the AMCU that gave employers three years to meet the demand in stages, offering instead to raise wages by as much as 9 percent. Mediators say the sides remain far apart.
Amplats is best-positioned of the three to keep supplying its customers for the longest, Simon Hudson-Peacock, a fund manager at Momentum Asset Management (Pty) Ltd. in Johannesburg, said today by phone. “Anglo Platinum is probably the more defensive of all the companies under the current strike circumstances.”
The company had the equivalent of 400,000 ounces of unrefined platinum, Chief Executive Officer Chris Griffith said Feb. 3. It is losing about 4,000 ounces of daily production, Amplats said March 5. The strike is disrupting mines that contributed 46 percent of the company’s production in 2013.
Impala Platinum, the second-largest producer, guaranteed deliveries to customers overseas until the end of March, CEO Terence Goodlace said Feb. 27. Lonmin will miss its sales target of 750,000 platinum ounces for the year through Sept. 30 because of the strike that started Jan. 23, it said earlier this month.
Impala has lost 1.6 percent in Johannesburg trading since the strike was announced, while Lonmin is down 6.4 percent.
Amplats may also be rising on expectations that parent Anglo American Plc will unveil steps to reorganize the 80 percent-owned unit, Hudson-Peacock said.
“It’s not the platinum price, not the rand,” he said. “It’s more along the expectations for value unlock at some stage, in one form or another.”
The price of platinum, used in jewelry and for auto-catalysts in vehicles, has gained 1.3 percent since the strike was announced, and was at $1,472.50 an ounce at 3:50 p.m. in Johannesburg.
The strike is unlikely to be resolved soon, Justin Froneman, an analyst at SBG Securities Ltd. in Johannesburg, said by phone. “All the parties are just digging their heels in at the moment.”
No talks are currently scheduled, Charmane Russell, a spokeswoman for the producers at Russell & Associates, said in an e-mailed response to questions.
The AMCU plans a protest at Amplats’s offices in Johannesburg tomorrow, where it will hand a petition to CEO Griffith, the union said in an e-mailed statement.