Durban - Impala Platinum Holdings (Implats) shares slid for more than 4 percent in early trade on the JSE on Wednesday after the group announced that it planned to cut back on 1000 workers.
The announcement came as the company continued to battle protest action at its Marula mine in Mpumalanga.
The shares clawed back to close 2.68 percent weaker at R42.90.
Implats blamed low metal prices as a significant reason for its fortunes.
The world’s second-biggest platinum producer said the industrial action has cut the production of platinum in concentrate for the third quarter to end March by 47 percent to 9000 ounces, while the overall platinum production decreased 6.2 percent to 331000 platinum ounces compared to 353000 platinum ounces in the prior comparable period.
However, acting chief executive Gerhard Potgieter said the company’s outlook remained positive despite the challenges.
“There has been encouraging progress across the group in meeting our strategic objectives, despite persistently low metal prices and a challenging operating environment, including further community disruptions at our Marula operation,” Potgieter said.
The Marula mine employs almost 4400 workers and contractors.
Implats reduced its annual production forecast for the site in February due to protests in the community. The community owns a 9percent stake in the mine through a local trust.
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The protest action is directly related to certain community members being dissatisfied with the way in which the community’s 50percent interest in the Makgomo Chrome project is being managed by their appointed or elected representatives.
Production performance was also impacted by the closure of the hybrid mining section at the Clapham shaft during the review period.
As a consequence, tons milled decreased by a significant 43.3 percent to 221000 tons as compared to 390000 tonnes reported in the prior corresponding period. Tons milled over the nine-month period to end March decreased by 11.4 percent to 1.13 million tons, compared to 1.28 million tons in the prior corresponding period.
“Regrettably, the ongoing community disruptions and low metal prices have resulted in a further restructuring process at Marula that could result in large-scale job losses at this operation,” Potgieter said. “This is something the business and economy can ill afford, but remains imperative if we are to protect the financial viability of our business and preserve jobs as far as possible”.
Platinum miners have battled with low metal prices and demands for higher wages and living standards from their workers, while members of communities surrounding the mines have protested at a lack of housing and jobs.
Mish-al Emeran, an equity analyst at Electus Fund Managers, said productivity had always been an issue for Implats.
Emaran said production was also impacted by fatal incidents and community disruptions. “Improvement on these issues which negatively impact productivity is needed if it wants to sustain improved production,” said Emeran.