Coming off shift
at Impala’s Rustenburg
Johannesburg, South Africa — 24 July 2012 – Anglo American Platinum (Amplats) “’ the world’s top platinum producer “’ has signalled that it plans to trim loss-making shafts as producers of the metal grapple with depressed prices and a rise in union militancy.

Amplats, which showed an almost 80% fall in earnings this year, confirmed that it had experienced a brief strike last week around its Rustenburg operations, as inter-union rivalry spread through the platinum belt.

Acting chief executive Bongani Nqwababa told Reuters the strike had been limited and related to recruiting, but said Amplats had not yet recognised the upstart Association of Mineworkers and Construction Union (AMCU), which was locked in a turf war with the dominant National Union of Mineworkers (NUM).

Nqwababa, who stepped in last week when Neville Nicolau stood down after the company had flagged its earnings fall, said in a results presentation that he would not tolerate unprofitable ounces “’ a clear a signal that the group could move to close loss-making shafts, which was sure to spark more labour strife.

Separately, Aquarius Platinum warned of a winter of labour discontent in coming months.

“Unfortunately, the likelihood of industrial action over the South African winter is high, largely as a result of inter-union rivalries,” Aquarius said in a production update.

The company also said it had been hit by “intermittent unlawful industrial action at one of four shafts at its Kroondal operation in July.

Industrial action in South Africa this year has often been caused by workers switching allegiance to AMCU from the NUM and then embarking on illegal strikes for better wages. Such action earlier this year led to a six-week shutdown of the world’s largest platinum mine, run by Impala Platinum.

Sources close to AMCU told Reuters the action last week had been sparked off by workers seeking to quit the NUM to join AMCU.

The stakes are high in the industry and the economy as a whole, as food price pressures begin eating into the household incomes of lower-wage workers. That scenario will push wage demands higher at a time when South Africa’s platinum sector is barely profitable.

Amplats cut its 2012 production target slightly to between 2.4 and 2.5Moz and said this would likely be its output level for up to three years.

“We anticipate that this would leave the market in balance, increasing the chance of a deficit, which should increase prices,” Nqwababa said.

Source: Reuters Africa. For more information, click here.