Can Anglo American Platinum catch a break? After almost a decade of being battered by depressed prices, soaring costs and labour unrest, the company has seen its profits surge the past couple of years. Now an explosion at a plant in Rustenburg has forced the company to declare force majeure and slash its production guidance for the year.
Amplats' shares fell over 18% after the JSE opened on Monday 9 March, extending a sharp sell-off from Friday when the Anglo American unit declared a force majeure, which means it cannot meet contractual commitments because of circumstances beyond its control.
The company announced the temporary shutdown of its Anglo Converter Plant (ACP), part of its processing chain, following an explosion triggered by coal dust on 10 February, in which no one was hurt. A backup system was supposed to kick in, but water was detected in its furnace, which Amplats said "poses a high risk of explosion". Hence the temporary closure.
The company slashed its production guidance for the year by a fifth and the impact to earnings before interest, depreciation and amortisation will be around R18-billion for the full year. Amplats also buys concentrate for processing from other companies such...