LABOUR unrest has spread to Anglo American Platinum’s Kumba iron ore unit in South Africa, as around 300 striking miners downed tools.
Amplats has declared the strike illegal and is talking to the workers to encourage them back to work. Kumba’s Sishen mine produced nearly 40m tonnes of iron ore in 2011.
Amplats yesterday reassured investors that the Kumba unit had stockpiles of finished product to keep supplying customers “for some time”.
Earlier this week Amplats said the situation at its flagship site Rustenberg, which has five mines, had “worsened”, and shut the operations as a precaution.
Amplats’ Union mine in Limpopo, to the north-west of Rustenberg, is still shut amid ongoing strikes. Earlier this week miners refused to go underground for their shifts.
The world’s largest platinum producer is understood to be losing around 2,100 ounces a day in platinum output while the strikes continue.
Analyst Ben Davies at Liberum Capital said yesterday: “Amplats either gives into demands, continues to holds fast, or uses the opportunity to put operations on care and maintenance till a period of better pricing.
“The third scenario is what investors have been hoping for in this over supplied market, but it is unlikely to be without consequence for Anglo American, either from the unions or the government.”
As Amplats has the largest exposure to South Africa, and is “without any easy solutions” on the horizon, Davies expects underperformance to continue.
Meanwhile, South Africa’s Chamber of Mines, the main industry body for miners, said yesterday it was not planning to reopen wage talks for existing agreements in the gold and coal sectors, after the National Union of Mineworks said it had agreed to.
Around 75,000 miners are currently on strike in South Africa, or 15 per cent of the industry’s workforce, which is crippling the country’s production. Workers at miner Coal Of Africa are still on legal strike, and miner Petmin is dealing with unrest.
Miners Lonmin, Goldfields and AngloGold have all battled with labour unrest in the past few months.