Amplats Falls as Strikes Cause Loss for 2012: Johannesburg Mover

Anglo American Platinum Ltd., the biggest producer of the metal, fell the most in more than two months in Johannesburg trading after saying it will post a 2012 loss due to strikes that disrupted its mines in South Africa.

The stock declined as much as 3.4 percent to 483 rand, the biggest intraday drop since Oct. 29. It traded down 2 percent at 489.97 rand by 12:29 a.m. About 284,200 shares, 86 percent of the daily average for the last 90 days, changed hands.

Amplats, as the Johannesburg-based company is known, said the loss may be 24.87 rand to 26.24 rand on a basic earnings-per-share basis, compared with a profit of 13.74 rand the previous year. Amplats wrote down 6.6 billion rand ($760 million) in the carry-value of assets and projects “not in use,” and which are considered not economically viable in the current market environment, it said in a statement.

The update from Amplats “was slightly worse than people expected,” Simon Fillmore, chief executive officer of Independent Securities (Pty) Ltd., said by phone from Johannesburg.

Amplats was one of several South African mining companies to be hit by a wave of strikes in 2012 as workers demanded higher pay. Two months of “illegal action” drove down sales as walkouts at the company’s Rustenburg, Union and Amandelbult operations cut output by 306,000 ounces, Amplats said.

‘Remain Concerned’

Anglo American Plc owns 77 percent of Amplats and is reviewing the business. London-based Anglo may give details of the study of the platinum operation within “a few weeks,” Chairman John Parker said Jan. 8.

“We remain concerned regarding the company’s ability to initiate operational changes given the current South African social and political environment,” said Justin Froneman, an analyst at SBG Securities, in a note to clients today. The Johannesburg-based brokerage has a sell recommendation on Amplats, with an price target of 435 rand.

The stock’s 30-day historic volatility, a measure of stock swings, increased to 26.83 from 26.67 on Jan. 11. The FTSE/JSE Africa Index’s 30-day volatility measure was at 8.31 from 8.99 previously. A higher reading means an asset’s price can have bigger moves.

South African gold, iron-ore and coal mines were also halted by unauthorized strikes after Lonmin Plc agreed in September to award pay increases of 11 percent to 22 percent.

Before it's here, it's on the Bloomberg Terminal.