Amplats, the first of torrid reporting season

[miningmx.com] – THE full extent of the platinum sector’s problems will
be revealed in the coming month as the country’s principal mining groups will, one
by one, publish their financial statements for the first half of the year.

On Monday, Anglo American Platinum (Amplats) unveiled a 78% fall in interim
headline earnings; a cut-back in its production target for the year, and a R700m
reduction in capital expenditure, its second cut in spend in the last year. It has also
written off several hundred millions because of the desperate state of the
platinum market and cost inflation which, as usual, had exceeded expectations.

The results also come against the resignation of Amplats CEO, Neville Nicolau, a
move that triggered a wide-ranging realignment of the various Anglo Group South
African subsidiaries’ chief executives.

Amplats’ mines will in future be “reviewed’ under the control of Kumba Iron Ore
CEO, Chris Griffith, and it is widely expected that he will trim the fat in places.

The fact that South Africa’s platinum mines produced 25% less platinum group
metals (PGMs) to the end of May this year than in previous years apparently does
not make the slightest difference to the market surplus.

The major part of the decline in production arises from the large-scale labour unrest
at Impala Platinum, which paralysed the giant Rustenburg mining complex for the
major part of two months.

The country and world’s next largest platinum group, Impala Platinum, also has a
new boss from the beginning of this month: Terence Goodlace.

This group will announce its results for the year to end-June on August 23 – for a
year it would prefer to forget.

Aquarius Platinum, which has already suspended the lion’s share of its mine
production, will report on its financial year to end-June on August 8.

Royal Bafokeng Platinum releases its half-year report on August 20.

In the first half of last year the platinum price averaged $1,788/oz, but in the first
half of this year it averaged $1,556/oz – and it continues to slide. On Friday the
white metal was worth $1,394/oz.

If the exchange rate is taken into account, the average platinum price that South
African mines receive has fallen some 16.4% between the first half of last year and
that of this year.

Platinum shares, decline over 52 weeks:

Royal Bafokeng Platinum: 20.7%

Impala Platinum: -25.29%

Anglo American Platinum: -28.5%

Lonmin: -36%

Northam Platinum: -37.7%

Platfields: -55.56%

Eastern Platinum: -75.4%

Aquarius Platinum: -83.9%