Amplats Results: Huge Loss After Mine Woes

Amplats Results: Huge Loss After Mine Woes

A platinum miner in South Africa which delayed plans to lay off 14,000 workers has come under increasing pressure after profits plunged more than £100m.

Anglo American Platinum (Amplats) has posted a loss of $225m (£143m) for 2012 as it battles to keep the business alive.

The company reported a headline loss per share of 562 cents for the year, way off the profit of 1,365 cents reported in the previous year.

It is among several mining companies in South Africa grappling with higher expenses amid the worst industrial action the country has seen for decades.

A two-month illegal strike last autumn at its operations in Rustenburg, 70 miles northwest of Johannesburg, where police used rubber bullets as well as tear gas and stun grenades to dispel striking workers, has hit the company hard.

At the nearby Lonmin mine in Marikana, 34 striking workers died and a further 78 people were injured after police opened fire last August.

The walkouts by mineworkers cut its output by 8,675kg - reducing full year output by 8% to 62,370kg with refined production of 68.040kg 4% lower.

Last month, the firm announced its intentions to close and sell off several of its mines in a last-ditch attempt to return to profitability.

It has since agreed to postpone a decision on the cuts and delay the required 60-day consultation process by two weeks, and is engaged in negotiations with union leaders and the government to seek alternative solutions.

"The proposed portfolio review recommendations continue to require extensive consultation with government, organised labour and other stakeholders prior to implementation," said chief executive Chris Griffith, who made no mention of backtracking.

As well as having major implications for South Africa's turbulent labour relations, the plans to shed thousands of jobs has wider implications for the markets too.

As the world's largest manufacturer of platinum, Amplats produces 40% of global supply of the precious metal.

The company's plans to cut output by almost a fifth - or 11,340kg a year - would reduce its global output by 7%.

Analysts have said going back on its plans would unsettle investors more than the potential risk of further industrial strife.

Shares in Amplats have shed 21% of their value in the past year.

Violent illegal strikes in the platinum and gold industry claimed the lives of more than 50 people last year.