Amplats Says Profit Likely Wiped Out by Five-Month Strike

Anglo American Platinum Ltd., the world’s largest producer of the metal, said first-half profit dropped as much as 96 percent after a five-month strike in South Africa disrupted mining.

Earnings per share excluding one-time items probably declined to a range of 20 South African cents (2 cents) to 80 cents in the six months from 5.14 rand a year earlier, Amplats, as the Johannesburg-based company is known, said in a statement today. The stock fell to the lowest since June 30.

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

The strike by more than 70,000 miners at Amplats, Impala Platinum Holdings Ltd. and Lonmin Plc cost the companies 23.9 billion rand in revenue and workers 10.6 billion rand in wages by the time it ended on June 24. The strike pushed South Africa’s economy into contraction in the first three months of this year as mining output plunged in the country that accounts for more than two-thirds of the mined production of the metal.

The shares fell 2 percent to 466.50 rand by the close in Johannesburg.

“Amplats interims could provide direction for platinum group metals markets as the company may outline a restructuring plan following the strikes that potentially leads to reduced output and supportive of a longer term more balanced market, enabling price escalation and profits for platinum group metals producers,” Investec Ltd. said in an e-mailed note to clients.

Amplats is reviewing the viability of all its mines, it said June 24. It will release a full earnings report on July 21.

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