Amplats H1 earnings jump but warns against unsustainable wage hikes
* Earnings more than double boosted by higher metals price
* Warns against unsustainable wage hikes
* Hikes interim dividend
(Recasts with wage talks)
By Tanisha Heiberg
JOHANNESBURG, July 22 (Reuters) - Anglo American Platinum
(Amplats) on Monday reported half-year earnings more
than doubling, boosted by higher metals prices, but warned it
could not give unsustainable increases as sector wage talks
Higher prices for precious metals and a weaker rand currency
have improved operating conditions for South African producers
but the industry is still reeling from a 2014 strike that cost
billions and forced firms to cut jobs and shed mines after a
supply glut weighed on platinum prices.
"Having just come out of a very difficult environment over
the last couple of years. ...the industry has to be really
careful about embedding unsustainable increases in the base
wages," CEO Chris Griffith said.
The price of platinum has risen 7.1% in 2019 setting
the metal on course for its biggest gain in seven years.
The majority union in the platinum sector, the Association
of Mineworkers and Construction Union (AMCU), has demanded a
hike of 17,000 rand ($1,145) per month, or around
"We would really have to look at what inflation is and
around inflation is what we would still seek the wage settlement
to be," said Griffith, declined to give a number.
Amplats, which has not yet presented its offer to the
unions, said if the costs were too high it could hit jobs and
"If we would have to agree to increases like that then
basically you would kill the production at Amandelbult and
thousands of people would be without work," Griffith said.
For the half year to June 30 Amplats reported a 120% rise in
headline earnings per share, South Africa's main profit measure,
to 28.15 rand ($2.02) per share from 12.82 rand a year earlier.
It benefited from higher metals prices and a stock gain of 1
"We’ve seen steady production from our operations, though
certain headwinds, including Eskom power shortages and strike
action at Mototolo, have impacted our first half performance but
we expect to see a stronger performance in H2 2019," Griffith
Eskom cut power across the country in February and March as
low coal supplies, a cash crunch, and multiple failures at its
ageing power stations curbed supply.
The precious metals producer, which only resumed dividend
payments in February 2018 after a seven-year absence, hiked its
interim dividend to 11 rand per share compared with 3.74 rand
for the same period a year earlier.
($1 = 13.9313 rand)
(Additional reporting by Helen Reid; editing by Louise Heavens
and Jason Neely)
First Published: 2019-07-22 08:57:22
Updated 2019-07-22 14:26:55
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