Johannesburg, South Africa — 19 July 2012 – Anglo American Platinum (Amplats), the world’s top platinum producer, has issued a warning that first-half earnings “’ hit by lower sales and prices “’ will drop by as much as 78%.
Reuters reports that Amplats “’ which is a unit of global miner Anglo American “’ said in a statement issued here that it expected headline earnings per share for the six months to 30 June to total between 270 and 280 cents, from 1,236 cents a year earlier.
The company explained that sales volumes had been hit by the delayed restart of a converter plant after annual maintenance, and prices had remained weak. Higher-than-expected costs relating to labour, diesel and electricity had also weighed on earnings, it added.
South Africa’s platinum sector is battling the impact of weak demand, soaring costs and a government safety drive that has cut production as operations are suspended for safety violations.
Amplats also said it had incurred a loss of US31.39 million resulting from revaluation of its investment in Wesizwe Platinum.
It also took a one-time accounting charge of R388 million related to a write-down of its Tumela 4 shaft project and a R505 million charge from the suspension of its Marikana operations.
Anglo American is undertaking an operational review of Amplats, which it is expected to conclude later this year.
Analysts expect the review to outline the planned closure of some higher cost deep shafts, to signal some potential sales or exits from some joint ventures with rivals, and to focus its spending.
Source: Reuters Africa. For more information, click here.