Bloomberg News

Impala Platinum Gross Refined Platinum Output Fell 46%

May 29, 2012

Impala Platinum Holdings Ltd. (IMP), the world’s second-largest platinum producer, said third-quarter output of the metal fell 46 percent as union rivalry and a pay dispute prompted a six-week stay-away by workers.

“The strike resulted in significantly lower production at Impala Rustenburg,” the Johannesburg-based company said. Costs “were severely impacted by the strike,” it said.

Impala’s Rustenburg operation, the world’s biggest platinum mine, lost more than 120,000 ounces of output in the strike that started in mid-January. The stoppage was the main reason for South Africa’s economic growth slowing to an annualized 2.7 percent in the first quarter from 3.2 percent in the previous three months, Nedbank Group Ltd. (NED) said in an e-mailed statement today.

South Africa is the world’s largest producer of platinum, used in devices that cut harmful vehicle emissions and to make jewelry. Impala and Anglo American Platinum Ltd. (AMS) produce more than half of the world’s platinum.

Violent union rivalry in which a worker was shot stopped the mine again for two days last week. The operation is expected to return to full output next month, the company said.

The National Union of Mineworkers, South Africa’s largest miners’ union, has had 10,813 resignations at Rustenburg, Impala said. The rival Association of Mineworkers and Construction Union claims it now has more than 8,000 members and has approached the company for organizational rights, Impala said.

Output Decrease

A reduction of volume treated for third parties also cut production at Impala Refining Services, it said. Gross refined platinum output fell to 230,000 ounces in the three months through March from a year earlier, while palladium declined 43 percent to 160,000 ounces and rhodium decreased 37 percent to 40,000 ounces.

Impala’s third-quarter production missed BMO Capital Markets’ estimate for 266,000 ounces, analyst Edward Sterck said in a note.

Impala said it increased the pay of rockdrill operators, who started the strike in January.

Impala may look at a multi-union recognition agreement to resolve labor issues at its Rustenburg mine in South Africa, Chief Executive Officer David Brown said on an investors’ call today. The Rustenburg mine produced about 64,000 ounces this month and 50,000 in April, Paul Dunne, director of South African operations, said on the call.

‘Close to Balance’

The platinum market will probably be “close to balance” this year while palladium is likely to move into a deficit, Bob Gilmour, a spokesman for the company, said on the call.

The company’s Zimplats (ZIM) unit in Zimbabwe increased production 7 percent to 45,000 ounces, Impala said. Its second phase of expansion is on track to boost output to 270,000 ounces of platinum in fiscal 2014.

Impala yesterday denied breaking the law after the central bank ordered the company’s bankers to stop international transactions, including the processing of export documentation, until the company shifts its offshore accounts to the country.

The stock gained for a second day, adding 2.2 percent to 140.49 rand by the close in Johannesburg. Platinum for immediate delivery rose 0.4 percent to $1,444 an ounce by 4:17 p.m. in London.

To contact the reporter on this story: Carli Cooke in Johannesburg at

To contact the editor responsible for this story: John Viljoen at

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