Johannesburg, South Africa —23 July 2012 – The full extent of the platinum sector’s problems will be revealed in the coming month as the country’s principal mining groups will, one by one, publish their financial statements for the first half of the year.
Fin24 reports that last week Anglo American Platinum prepared shareholders for the results coming out today. In a trading update it warned that its first-half headline earnings had dropped 77%, while it had to write-off several hundred million because of the desperate state of the platinum market and cost inflation that, as usual, had exceeded expectations.
The next day chief executive Neville Nicolau’s immediate resignation was announced as part of a wide-ranging realignment of the various Anglo Group South African subsidiaries’ chief executives.
Angloplat mines will in future be “reviewed” under the control of Kumba chief executive Chris Griffith, and it is widely expected that he will trim the fat in places.
The fact that South Africa’s platinum mines produced 25% less platinum group metals (PGMs) to the end of May this year than in previous years apparently does not make the slightest difference to the market surplus.
The major part of the decline in production arises from the large-scale labour unrest at Impala Platinum, which paralysed the giant Rustenburg mining complex for the major part of two months.
The country and world’s next largest platinum group, Impala Platinum, also had a new boss from the beginning of this month – Terrence Goodlace. This group will announce its results for the year to end-June on 23 August – for a year it would prefer to forget.
Aquarius Platinum, which has already suspended the lion’s share of its mine production, will report on its financial year to 30 June on 8 August and Royal Bafokeng Platinum releases its half-year report on 20 August.
In the first half of last year the platinum price averaged US$1,788, but in the first half of this year it averaged US$1,556 – and it continues to slide. On Friday the white metal was worth just over US$1, 400 a fine ounce.
If the exchange rate is taken into account, the average platinum price that South African mines receive has fallen some 16.4% between the first half of last year and that of this year.
Source: Fin24. For more information, click here.