Johannesburg - Anglo American Platinum said it expects prices will remain depressed as the world’s largest producer of the metal wrote down mines and operations by R14 billion ($876 million).
Amplats, as the world’s largest producer of the metal is known, will delay decisions on whether to proceed with capital projects until next year due to low prices, it said in a statement on Monday. Platinum, used to clean automotive emissions and for jewellery, has almost halved since the start of 2011.
“The platinum market is expected to move closer to balance in the short term before primary supply is constrained in future years by closures and reduced capital expenditure,” Amplats said in the statement.
The company, which is controlled by Anglo American, and other major producers such as Impala Platinum Holdings and Lonmin are staving off the plunge in prices by selling or closing mines, reining in expenditure and cutting thousands of jobs. The cutback measures are weighing on growth in South Africa, the source of more than 70 percent of the world’s platinum, in a country where more than one in four is unemployed.
Amplats’s impairments of R14 billion represent about 30 percent of the company’s book value, it said.
Headline earnings, which exclude one-time items, were R107 million for the year through December, down from R786 million in 2014, Amplats said.
Amplats continues with the process to dispose of the Union mine. “If it doesn’t generate cash and a sale cannot be progressed in the first half of 2016, then the company will consider alternative options including plans to place Union on care and maintenance,” it said.