Johannesburg - Anglo American Platinum (Amplats) would maintain its 2.3 million ounces production target despite the two-week strike at its Rustenburg operations, it said on Friday.
“In July, we guided the market that our production target for 2013 would be 2.3 million platinum ounces. This guidance remains in place notwithstanding the industrial action.”
Amplats, a subsidiary of Anglo American, said that as a result of its restructuring, the short- to medium-term forecast for production would remain at between 2.2 million ounces and 2.4 million ounces a year.
Amplats confirmed that it had lost output of 44 000 platinum ounces as a result of the strike. It also warned that it was likely to miss its cash operating cost target because of restructuring, strikes and the outcome of wage negotiations.
Operating costs in the third quarter were R17 381 a refined platinum ounce; its full-year guidance was R17 000 a refined platinum ounce.
The Amplats share rose by 2.40 percent to close at R436.55 on the JSE on Friday.
The report was not expected to have a large impact on the share price and held no great surprises, Michael Kavanagh, a metals and mining analyst at Noah Capital Markets, said on Friday. “While we are supportive of Anglo Platinum’s long-term strategy, we feel that the current share price is extended and insufficiently discounts the risks facing the company in the near term. As such, we retain our sell recommendation on the stock.”
Platinum output grew by 5 percent in the quarter to September compared with the previous period, Amplats said.
In August, production at the Khomanani mine, Khuseleka 2 shaft and Union north decline was suspended as part of the restructuring plans.
Amplats said the redeployment of labour following the placement of mines on care and maintenance was under way and was expected to yield benefits from the fourth quarter.
Meanwhile, Kumba Iron Ore, also an Anglo subsidiary, said it was likely to miss its export sales target of 40 million tons. It said export volumes in the September quarter declined by 5 percent year on year and by 7 percent compared with the previous quarter to 9.4 million tons, mainly due to a reduction in Sishen mine’s production and the annual maintenance shutdown of the rail line and port by Transnet.
Kumba reported quarterly production of 9.5 million tons, a slump of 24 percent year on year and 16 percent compared with the previous quarter.
The Sishen mine pit was operating at a quarterly run rate of about 8 million tons, it said.
“The bottom line is that this is a negative release and should be reflected in the share price,” Kavanagh said. Kumba shares slid 7.57 percent to R438.06.
Amplats planned to cut 14 000 jobs as it consolidated five Rustenburg mines into three. But due to government pressure the number was cut to 3 300.
Production at Amplats Rustenburg operations ground to a halt from September 27 for two weeks as the Association for Mineworkers and Construction Union (Amcu) challenged the retrenchments. As part of an agreement with Amcu, Amplats agreed to award the employees voluntary severance packages and place about 328 employees in jobs occupied by contractors. - Business Report