Northam Platinum Says Earnings to Rise, Warns on Strike Impact
Northam Platinum Ltd. (NHM), which operates the world’s deepest platinum mine in South Africa, expects earnings for fiscal 2013 to be 60 percent to 70 percent higher than a year earlier, thanks to rising sales
The increase in earnings for the 12 months through June will reflect “higher sales volumes coupled with a higher average basket price realized during the period, notwithstanding certain production interruption experienced,” it said in a statement today. Earnings per share a year ago were 81.2 cents, according to the statement.
A weak rand, the worst performer this year among 16 major currencies tracked by Bloomberg, is helping the industry to offset the decline in platinum price so far in 2013.
Northam warned that strike action as a result of deadlocked wage talks will impact operations. The Association of Mineworkers and Construction Union wants entry-level wages for underground workers to be more than doubled to 12,500 rand ($1,270).
Production at the company’s Booysendal mine started on July 1, with 15,000 ounces of platinum group metals produced and 3,500 ounces sold. Rebuild works at the Zondereinde smelter are proceeding according to plan, it said.
Northam shares have declined 3.4 percent this year compared with a 26 percent drop in the six-member FTSE/JSE Africa Platinum Mining Index. The stock closed 0.2 percent lower at 36.71 rand yesterday, valuing the company at 14 billion rand.
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