By Laura Clarke and Devon Maylie
Platinum prices rose to their highest level in four months
Wednesday as spreading labor unrest in South Africa raised the
possibility that a further 40% of world production of the metal
could be affected by a dispute that has already shut down
significant output.
South Africa, which accounts for 75% of world platinum supply,
has been roiled by violent clashes at three of its four leading
platinum mines this year. Fears that a near two-week standoff
between workers and bosses at Lonmin PLC's (LMI.LN) Marikana mine
could spread to the world's biggest platinum producer,
Anglo-American Platinum Ltd. (AMS.JO), or Amplats, had likely
underpinned the price move, traders and analysts said.
Platinum hit $1,526 a troy ounce Wednesday morning, its highest
level for 15 weeks, before slipping back to trade at $1,512.50/oz
at 1059 GMT.
"The risk of contagion of the South African tensions will have
sent short positions running for cover. It doesn't look like the
situation is going to be secured overnight," said a London-based
trader.
Amplats workers Wednesday became the latest group of platinum
miners to demand higher wages, following similar requests by
employees at Lonmin, Impala Platinum Holdings Ltd. (IMP.JO) and
Aquarius Platinum Ltd. (AQP.AU, AQP.LN). Rock drill operators at
Royal Bafokeng Platinum Ltd. (RBP.JO) have also made similar wage
demands, local media reported Wednesday.
The situation has been most severe at Lonmin's Marikana mine,
where 44 people have died in violence since trouble broke out on
Aug. 10. The dispute has riven public opinion in South Africa and
escalated a growing rivalry between the country's two largest mine
unions.
Until today, Amplats was the only one of the country's top four
primary platinum producers to have been unaffected by serious
labour disputes. Amplats said Wednesday that, despite the demand
from some workers for higher wages, there have been no stoppages or
strike threats.
The longer-running disputes at Impala, Lonmin and Aquarius have
all forced the companies to shut down some output.
The trouble has caused platinum prices to rebound, after they
slackened in recent months as demand from the world's auto makers
became weak. ABN AMRO said Wednesday that if the labor tensions
remain unresolved, "a further out performance of platinum is on the
cards."
Analysts said the labor dispute could also have an impact on
sentiment towards the country's currency, the rand, which was
weaker Wednesday after a strong rally Tuesday.
"On the whole we consider the South African currency's
appreciation potential to be limited short term as the recent
escalation of a protest at a platinum mine negatively affected
investor confidence," said Commerzbank.
-Write to Laura Clarke at laura.clarke@dowjones.com and Devon
Maylie at devon.maylie@dowjones.com (Alex Macdonald and Alexandra
Fletcher in London contributed to this report.)