Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
Labour unrest has reached the perimeters of the world’s largest producer of platinum as Anglo American plc’s (LSE:AAL) subsidiary suspended operations at its Rustenburg mines to “protect the safety and security of its employees from outside intimidation”.
In a statement released shortly after 2:00 PM GMT, Anglo American said its 80% owned Anglo American Platinum Ltd, supplier of around 40% of the world’s demand for platinum, has decided to suspend operations indefinitely as employees are being intimidated by threats of violence in the Rustenburg area.
Anglo American Platinum’s Chief Executive, Chris Griffitth, clarified its employees are not on strike.
“However, in light of the current volatile situation in the Rustenburg area, where our employees, who want to go to work, are being prevented from doing so and are being intimidated by the threat of violence, Anglo American Platinum has decided to s uspend its operations in the Rustenburg area with immediate effect,” Mr. Griffith stated.
Platinum industry under threat
Tensions have been rising in the platinum-rich Bushveld complex, home to the world’s top producers of the jewelry material, 60 miles northwest of South Africa’s capital, Johannesburg,tied up to cries for pay increases with over 40 people dead last month following strikes by Lonmin plc (LSE:LMI) employees.
Impala Platinum Holdings Limited (LSE:IPLA), world’s number 2 platinum producer, is also under threat of a second strike as the company tries to negotiate a second demand for wage increase for its workers, who are asking another 10% rise – the second within six months.
A six-week strike earlier this year resulted in a loss of about £212 million in revenue, due to a substantial decline in production and hurting Implat’s 2011-2012 financial position.
Earlier today, South African police noted about 1,000 mineworkers had a confrontation with security last night at Anglo American’s Siphumelele mine, blocking road access leading to the Rustenburg site, and have since spread across other shafts this morning, according to Regional police spokesperson Thulani Ngubani.
Following today’s news, price of platinum reached its five-month high, rising to about US$1,636 per ounce, while shares of both Anglo American and Lonmin fell, trading on the London Stock Exchange. Impala is currently spared as the firm is currently trading on ex-dividend.
Shares of Anglo American dropped 2.5% to £19.07 by 3:30 PM GMT while Lonmin lost 5.4% to £5.78 as investors are still worried of the outcome of negotiations with Lonmin miners.
Meanwhile, Chairman of Anglo American Platinum, Cynthia Carroll, condemned the actions she referred as “illegal” and “unacceptable” and the firm is now in talks with the government and the labour unions to find a “swift and peaceful resolution” to protect its employees.
“We have taken this decision to suspend our operations in order to help ensure the safety of our employees – our absolute priority,” she said.
Company Spotlight
Anglo American plc is a FTSE 100 constituent of the London Stock Exchange and one of the world’s largest mining companies. As the leading producer of platinum, Anglo American produced over 2.6 million ounces of the precious metal from 10 mines in the Bushveld complex in South Africa and other mines in Zimbabwe.
