Anglo American Platinum counts cost of violence and strikes in South Africa

http://www.guardian.co.uk/business/2013/feb/04/anglo-american-mining-cost-violence-strikes

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Anglo American Platinum, the world's biggest producer of the precious metal, has swung into the red at the end of a year scarred by violent unrest and strikes at its South African operations.

The miner, which is 80%-owned by London-listed Anglo American, announced plans to lay off up to 14,000 people last month, prompting another strike and fuelling fears of a fresh crisis across South Africa's mining sector.

More than 50 people were killed in strikes in the platinum belt, near Rustenburg, west of Pretoria, in August and September. The worst violence happened at Lonmin's Marikana mine where 34 demonstrators were killed and 78 injured when police opened fire on 16 August.

The unrest spread to other companies, including Amplats, where workers staged a two-month illegal strike. That too descended into violence and at least one miner was killed in clashes between police and striking workers.

Amplats said on Monday industrial action had cut full-year year output by 8% last year, while sales dropped by 16%. The company posted a hefty operating loss of 6.3bn rand (£450m), down 180% from a year earlier – hit by falling sales, lower platinum prices and soaring costs. Headline losses per share rose to 562 cents, way off the profit of 1,365 cents reported in the previous year.

Last month Amplats set out plans to cut output by almost a fifth in an attempt to save 3.8bn rand annually. The company aims to close four mine shafts in Rustenburg in the north of the country and sell a smaller operation further east. But the proposal was condemned by South Africa's mining minster and caused the latest walkout at three Amplats mines.

Management has agreed to delay the required 60-day consultation process by two weeks to allow the parties to seek alternative solutions. Its chief executive, Chris Griffith, said: "The proposed portfolio review recommendations continue to require extensive consultation with government, organised labour and other stakeholders prior to implementation."