South Africa's strike-hit Implats says violence is 'devastating'

Reuters News
Posted: May 16, 2014 6:59 AM

By Ed Stoddard

JOHANNESBURG (Reuters) - Impala Platinum described on Friday as "devastating" the impact on its employees of a 16-week strike at its main South African operation in Rustenburg and said it had lost more than $500 million in revenue.

The company signaled it expects the strike to drag on.

"The human tragedy that is unfolding as a result of our employees not earning any income and the violence and intimidation being experienced on the platinum belt is devastating," it said in its third-quarter production report.

The strike is centered on the platinum belt town of Rustenburg northwest of Johannesburg and Implats said the reopening of its mine there "will only be considered when the risk of violence and intimidation can be eliminated".

"The resumption of normalized production levels at Impala Rustenburg, once the strike ends and operations resume, are expected to take at least three months to achieve," it said.

"Consequently, no further production is expected from this operation in the final quarter of FY2014."

Anglo American Platinum and Lonmin have also been hit by the wage strike by the Association of Mineworkers and Construction Union (AMCU) and their attempts to woo workers back have been met this week by violence.

Four miners were killed last weekend and rival unions have said intimidation has been on the rise as the companies take their latest wage offer directly to employees after talks collapsed in late April.

AMCU denies allegations it uses violence to keep its roughly 70,000 members on the platinum mines in line.

In the three months to the end of March, Implats said it had produced 205,000 ounces of gross refined platinum, 41 percent lower than the comparable period in 2013.

Underscoring the widening impact of the strike, the longest and costliest ever to hit South Africa's mines, Implats said to date it had lost "246,000 ounces of platinum production, equivalent to revenue of 5.4 billion rand ($520 million)".

The company's employees have lost 1.4 billion rand ($134.75 million) in wages, it said.

For the full financial year, the company said it expected group refined platinum sales to be around 1.2 million ounces.

"This will include approximately 150,000 ounces of platinum that will be drawn down from metal inventories (pipeline and refined stocks), with no further excess stocks immediately available for draw down and/or sale," it said.

"The group will continue to support customers through this difficult period, taking into account available metal and individual customer needs," it said, reiterating that no force majeure notices are expected as customers have agreed to reduced deliveries.

(Reporting by Ed Stoddard; editing by Olivia Kumwenda-Mtambo and Susan Thomas)