Platinum miner Anglo American Platinum’s (Amplats) headline earnings for the year ended December 31, 2014 decreased to R786 million, or 301c from R1.45 billion in 2013, or 556c, as a result of the five-month strike by workers at its operations at the start of 2014, the company reported on Monday.
Amplats also reported a decrease in its refined platinum production for 2014 at 1.84 Moz from 2.32 Moz in 2013. This was due to the strike which led to a loss of planned production at Rustenburg, Union and Amandelbult mines and the year-on-year impact of mine closures which have been successfully completed as part of the restructuring of the business, the statement said.
As a result of the strike period ended June 24, 2014, Amplats’ total lost production amounted to 424 koz-equivalent of refined platinum.
The Rustenburg operations lost 165 koz, Amandelbult 167 koz and Union 87 koz, while affected third-party purchase volume situated at Rustenburg and Amandelbult concentrators lost 5 koz.
Whilst planned production at Rustenburg, Union and Amandelbult was impacted by the strike, the process operations, joint venture operations, Mogalakwena and Unki continued to operate throughout the period with production either consistent or improved year on year.
Upon resolution of the strike, Amplats implemented a return to work programme, which estimated a three-month production ramp-up before returning to steady-state production.
Total lost planned platinum production as a result of the ramp-up amounted to 108 koz, resulting in a total loss of production of 532 koz.
The agreed wage settlement resulting from the strike has led to an effective 8.4% per annum cost to company on average over the 3 year settlement period. The costs to Amplats will be 10.5% in year 1; 7.7% in year 2 and 7.1% in year 3. Amplats believes that the agreement reached achieves a sustainable future for the company and provides employees with a competitive increase under current financial circumstances.
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