Anglo American Says Platinum Output Declines 2% on Strikes
Anglo American Plc (AAL), the world’s biggest platinum producer, said output of the metal fell 2 percent in the first quarter because of strikes at some of its operations.
Production dropped to 583,000 ounces in the three months through March from a year earlier due to work stoppages and lower output from its Unki mine in Zimbabwe, Anglo American Platinum Ltd. (AMS), the London-based company’s platinum unit known as Amplats, said in a statement. The shares rose for the first time in three days, climbing 3.5 percent to 338.47 rand by the close in Johannesburg.
“The global platinum market is likely to be balanced in 2013 as a result of reduced production,” Johannesburg-based Amplats said. “If South African platinum production returns to pre-strike levels, then the market would be oversupplied.”
Producers in South Africa, which has the world’s largest known reserves of platinum, are struggling with higher costs after strikes led to above-inflation wage gains, while demand wanes. Amplats in January said it planned to cut 400,000 ounces of platinum production annually, or 7 percent of global output, to help return to profitability.
Amplats’ proposals include idling four shafts and potentially cutting as many as 14,000 jobs. The company put the plans on hold for 60 days for talks after the government criticized its handling of the matter and threatened to revoke some mining licenses. Amplats and the Department of Resources have extended talks until April 30, it said.
The company expects to refine and sell 2.2 million ounces to 2.3 million ounces of platinum in 2013, subject to the implementation of the review, it said.
Anglo American said the $8.8 billion Minas-Rio iron-ore project in Brazil continued to progress with the target of its first ore shipment by the end of 2014. Minas-Rio, Anglo’s largest project, has suffered cost blowouts and delays.
Mark Cutifani left AngloGold Ashanti Ltd. (ANG) as chief executive officer to replace Cynthia Carroll in the same role at Anglo American at the start of this month. He needs to concentrate on shareholder returns, Clinton Duncan, a resource analyst at Avior Research (Pty) Ltd., said by phone from Johannesburg.
“They’ve got to really focus on the assets in their portfolio and try to make them as profitable as possible, given Amplats at the moment and given Minas Rio,” he said.
To contact the editor responsible for this story: John Viljoen at email@example.com