Amplats losing 3,100 oz of output a day from South Africa strikes

Reuters
Miners gather near the Anglo American Platinum's Thembelani mine near the mining town of Rustenburg, northwest of Johannesburg September 30, 2013. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) - Anglo American Platinum said on Thursday it is losing an average of 3,100 ounces of production a day from a strike at its South African operations. Members of the Association of Mineworkers and Construction Union (AMCU) downed tools last Friday in protest to Amplats' plans to cut 4,800 jobs, bringing the bulk of operations at the world's top platinum producer to a standstill. "The company continues to record a low turnout at its Rustenburg and the North of the Pilanesburg operations, with less than 20 percent attendance," Amplats said in a statement. The lost output is equal to $4.3 million a day at the current spot price of $1,380 an ounce, according to Reuters calculations. Talks with the union to end the strike are continuing, Amplats said. Amplats, a unit of global miner Anglo American, had originally planned to cut as many as 14,000 jobs but scaled back its plans after fierce criticism the government and unions. Amplats' return to profitability hinges on an overhaul of its Rustenburg mines, northwest of Johannesburg, where it plans to drastically curtail production. But jobs are a sensitive issue in South Africa, where official unemployment is around 25 percent and the ruling African National Congress faces elections next year. The platinum belt near Rustenburg was rocked last year by waves of violent wildcat strikes borne out of a turf war between AMCU and the once-dominant Nation Union of Mineworkers. The unrest left scores of people dead and severely weakened investor confidence in Africa's largest economy. AMCU wants the company to provide voluntary separation packages for older miners near retirement and spare the jobs of younger workers, which the union says will bear the brunt of the lay-offs. Much of AMCU's membership in the platinum belt consists of younger miners. Shares of Amplats have shed almost 8 percent since the start of the strike, underperforming the JSE's Platinum index which has is almost 6 percent lower.