Business

Anglo American shuts South African platinum mine

  • 12 September 2012
  • From the section Business
Police keep watch during the arrival of some of the mine workers, at a Garankuwa court outside Pretoria (20 August 2012)
The anger at the Lonmin sites have spread to other mines in South Africa

UK-listed miner Anglo American has suspended operations at its platinum mines in South Africa to "protect the safety of its employees".

The miner blamed the "current volatile situation in the Rustenburg area, where our employees, who want to go to work... are being intimidated by the threat of violence".

Stick-waving miners have blockaded roads around the mines.

Shares in Anglo American fell almost 3% in London.

South Africa is home to 80% of known reserves of platinum. The price of the element, which has a wide range of industrial and medical uses, has gained nearly 20% since the police shootings at Marikana.

"The Rustenburg operations being suspended, for Anglo Platinum, is clearly a big issue," said David Jollie, an analyst at Mitsui Precious Metals.

"If they remain suspended for a while, it becomes a lot more important in changing the balance of the market and changing investor risk perceptions as well."

Meanwhile, Lonmin shares fell another 4% on Wednesday as a wildcat strike at its Marikana mine continued.

Lonmin is the owner of the site where a clash between striking miners and police resulted in the deaths of 34 others shot by police last month.

The strike at the operations of Lonmin has removed close to 60,000 ounces of platinum from the market in a month.

'Risk to viability'

Cynthia Carroll, chairman of Johannesburg-based Anglo American Platinum, said: "We have taken this decision to suspend our operations in order to help ensure the safety of our employees - our absolute priority.

"We are in touch with the authorities at the highest level to identify how we can work together with our tripartite partners - government and the recognised labour unions - to achieve a swift and peaceful resolution to these illegal actions."

She added: "Our Rustenburg operations are already under considerable economic pressure and the longer it is necessary to continue this suspension, the greater the risk to their long-term viability."

All five of Anglo American's mines in the area are now closed, it said.

On Tuesday, the South African politician Julius Malema called for national strikes across all South African mines for five days each month, to fight for an increase of three times the current national average.

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