Strikes hit platinum profit

Strikes at South African operations of platinum miner Implats hit profits and revenue, as the industry battles lower sales volumes, the company said in its year-end financial results today.

"Implats' financial performance was significantly impacted by lower production volumes primarily due to the six-week strike at Impala Rustenburg," chief executive Terence Goodlace said in a statement.

He said revenues fell by R5.5 billion ($668 million) in 2011 to R27.6 billion.

Gross profit fell by 40% to R7.0 billion and net profit by 37% to R4.3 billion.

"The platinum industry is experiencing increased levels of industrial action as witnessed at both Impala Rustenburg at the beginning of this year and more recently at Lonmin with the associated tragic loss of life," said Goodlace.

"These developments pose a significant risk to the industry."

Goodlace condemned the violence where 34 striking Lonmin miners were killed by the police, saying he firmly believed that "the disputes facing the industry today can only be resolved in an environment of peace, stability and order."

The Johannesburg and London listed firm said the six-week illegal strike at the Impala operations had a significant impact on the production of platinum group metals and the financial performance of the group in 2012.

In March the company fired 17,000 of its striking workers but later asked them to reapply for their jobs.

The strike resulted to a 21% reduction in platinum production to 1.45 million ounces.

The company described the financial year that ended on June 30 as "extremely difficult". Production declined by 20% to 750,100 ounces of platinum.

However, the firm applauded its Zimbabwe operations for delivering an "excellent operational performance".

It said the $460 million phase two expansion at Zimplats continued to make progress and noted the conclusion of the equity deal with the Zimbabwe government, which was "accepted in principle".

In March, Zimplats reached an agreement with the government of Zimbabwe to transfer a 51% stake to local investors, as required by the country's controversial indigenisation policy.