Impala earnings to tumble on stoppages

Impala Platinum expects full-year earnings to tumble as much as 75% because of lower local prices and production stoppages.

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Johannesburg - Impala Platinum, the world’s second-largest miner of the metal, said full-year earnings will tumble as much as 75 percent because of lower local prices and production stoppages.

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Headline earnings are expected to be between 9 cents to 16 cents a share for the year ended June 30, compared with 36 cents a year earlier, the Johannesburg-based company said in a statement on Monday.

The world’s top platinum miners, including Anglo American Platinum and Lonmin, have seen earnings squeezed by a more than 40 percent plunge in platinum prices in the past five years. Platinum averaged 13,825 rand an ounce in the year to June 30, almost 3 percent below the mean a year earlier. The metal is Impala’s main earner and the company has also been plagued by safety-related stoppages in the past year.

Impala’s Number 14 shaft, which produces almost a fifth of its metal, “has had a horrific year”, said Rene Hochreiter, a Johannesburg-based analyst at Noah Capital Markets.

On May 17, two miners at the shaft were killed after an underground area caved in and Chief Executive Officer Terence Goodlace announced his resignation a day later. As of June, eight workers have been killed at Impala’s operations this year. Every fatality causes lost production while government inspectors examine the site.

Impala shares, which closed before today’s profit warning, have more than doubled this year amid a broader rebound in mining stocks. The company also produces palladium, rhodium, nickel and copper.

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