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S.Africa’s Implats in the red after platinum strike

Published on 28/08/2014

South Africa's Impala Platinum (Implats) announced a net loss on Thursday and waived a dividend for the financial year ending in June, reflecting the fall-out from a bitter five-month strike.

The world’s second-biggest platinum group said it had posted a net loss of 129 million rand ($12 million), while turnover fell by three percent from the level the previous year to 29.028 billion rand ($2.7 billion).

“It has been a challenging year for Implats,” CEO Terence Goodlace said in a statement.

“Lower than expected platinum group metal prices together with escalating cost pressures and the unprecedented five month industry strike at Impala Rustenburg severely impacted performance.

“Despite this, the operations outside the Rustenburg area, Zimplats, Mimosa, Marula and Two Rivers, all performed well and delivered good safety and operational results.

Throughout the strike, deliveries continued to key customers and the local South African market, which remained adequately stocked”, he said.

An ounce of platinum was worth 1,437 dollars on average in the first half of 2014, or $50 less than in 2013, Implats noted.

The depreciation of the rand was in its favour, however, increasing its revenue in rand terms.

The group’s total production of platinum contracted by about a quarter in the past year to 1.178 million ounces, mainly because of the pay dispute that also affected Implats’ competitors and was ended only by strong wage increases for the least-skilled miners.

The strike alone caused a loss of production of 312,000 ounces of platinum, the group said.

Production is expected to return to normal at Impala Rustenburg in approximately four months, but margins would remain under pressure in the short and medium term, the group said.