platinum hits $1730 supply strugling

Impala Platinum warns Rustenburg disruption will cut April deliveries 22nd February 2012
Impala Platinum (Implats) has warned that deliveries in April could be reduced by half following labour problems at its flagship Rustenburg mine.

Illegal strikes and subsequent violent disturbances have halted production at the mine, but the company's refinery had held enough platinum group metals for four months.

Implats has so far lost over 80,000 oz since the problems began, equivalent to around a month's worth of production.

With the four months' worth of stockpiles in the refinery and normal operations yet to resume, Implats anticipates April deliveries being reduced.

"It is a little difficult to try and estimate the quantum for April, but our best guess at this stage would be again for about 50 per cent of normal," Implats group executive for marketing Derek Engelbrect told customers in a note seen by Reuters.

Implats dismissed over 17,000 workers at its Rustenburg operations following wildcat strikes and while it is in the process of rehiring, only around half have come forward so far.

Chief executive David Brown estimated that it would take another month to resume normal production at the mine, which could make it hard for the world's second biggest primary platinum producer to hit its full-year target for this year.

"The announced loses have breached our initial forecasts. An ongoing strike would therefore result in absolute pgm sales losses, which has been largely mitigated to date by the existence of pgm inventories," SBG Securities pgm analyst Justin Froneman told Reuters.

"Any additional losses would likely result in full-year production downgrades," he said.