[miningmx.com] — IMPALA Platinum has warned customers that its April platinum deliveries would be down about 50% due to labour problems at its Rustenburg mine.
The resumption of normal operations has been further delayed, and April deliveries will be affected, Implats group executive for marketing, Derek Engelbrecht, said in a letter to end-users.
“It is a little difficult to try and estimate the quantum for April, but our best guess at this stage would be again for about 50% of normal,” Engelbrecht said in the letter, obtained by Reuters.
Implats has lost more than 80,000 ounces of platinum production over the past few weeks as the company fights to get miners back to work at South Africa’s Rustenburg, the world’s largest platinum mine.
Illegal strike action at the mine led to the dismissal of over 17,000 people earlier this month, bringing it to a standstill.
The company is rehiring these workers, but only about half have come forward, and Implats has warned that it could take weeks before the mine is back in full production.
The company’s refinery had held enough supplies to process platinum group metals (PGM) for four months, and it has lost at least a month’s production, so the strike could start affecting deliveries within three months.
“This is part of our ongoing procedure to manage the market impact of the strike,” Implats CEO David Brown said of the memo sent to clients.
Analysts, who are not seriously concerned about the loss of production so far, said Implats is unlikely to declare a force majeure and has instead got its clients to agree on reduced deliveries until the mine is back in full production.
“The announced loses have breached our initial forecasts. An ongoing strike would therefore result in absolute PGM sales losses, which has been largely mitigated to date by the existence of PGM inventories,” said SBG Securities PGM analyst Justin Froneman.
“Any additional losses would likely result in full-year production downgrades,” he said.
Analysts have said they would be concerned if the labor unrest spread to other companies.
Froneman said other platinum producers might be affected should Implats accede to current demand for wage increases, which could put pressure on them to follow suit.
“It is a messy situation and we are watching it closely. The timing of a resolution is critical,” he said.
The labour dispute, which has pitted rival unions against each other, has been marked by violence. A police spokesman said an Implats conference room near one of the Rustenburg shafts had been set alight on Wednesday morning.
