Impala Platinum is losing over R9 million per day as strikes in South Africa continue to affect its production, South African newspaper the Times claimed yesterday (27th August).

The world's second-largest platinum producer is attempting to thrash out a deal with workers who decided to down tools on Monday night over a long-running wage dispute.

Impala offered the employees a ten per cent pay rise across the board but the National Union of Mineworkers (NUM) now says its members are seeking a 14 per cent hike.

However, David Brown, the company's Chief Executive, revealed that he will not bow to the demands and could even sack some of the workers if they do not return.

"You have to draw a line in the sand. The strike is reducing output and cash flow, and it puts pressure on the company," he told Reuters.

"We reserve the right to mass dismissals, it is one of the options we have."

The NUM acquired a certificate from the Commission for Conciliation, Mediation and Arbitration for the industrial action and spokesman Lesiba Seshoka insisted it is legal.

He also explained that the union - whose members accepted Impala's ten per cent offer "in principle" - has not yet formally committed to its position on calling off the strike.

"There is no wage agreement until it's signed. We said that we accept the offer in principle, pending consultations with our members," he said.

Impala also revealed on Friday that the strikes - thought to involve 20,000 workers - have now spread to its Marula mine, increasing the risk of company-wide industrial action.

"The strike has partially affected Marula since last night's shift, some people decided not to go to work and production will be affected," spokesman Bob Gilmour told Reuters.

Marula, which is 73 per cent-owned by Impala, produced about 73,000 oz during the 2009 financial year, while tonnes milled increased by eight per cent to 1.57 million.

However, these figures were lower than expected, which can mainly be attributed to a number of safety stoppages and sluggish progress in ramping up to full production.

As a result, Mr Brown revealed that the rhodium price-dependent facility - which is located on the eastern limb of the Bushveld Complex - could be shut down.

"It's imperative that the operation achieves its production targets. Quite clearly, we'll be setting ourselves targets to make sure that the mine is at least breaking even, or is restored to profitability," he was quoted as saying by Mining Weekly.

"We will be able to come back early next year to tell the market where we are with Marula, but I think the obvious is quite clear: if Marula doesn't meet its set targets and fails to return to profitability, then we will have to look at closure for that mine."

Meanwhile, Impala has also confirmed that the recent accident at its Lease 14 shaft, which killed nine workers, will see about 150,000 oz worth of platinum production lost in the next five years.

A third of that figure will be cut this year, with the remainder being lost at a rate of 20,000 oz per year as mechanised mining adjustments are made to the affected shaft.

Furthermore, the changes - which will cost the company almost R1.5 billion - are set to limit the Impala Lease area output to 950,000 oz annually for the next five years.

Job cuts could yet be made as a result of the incident, according to Business Report.

Sources:

Underperforming Marula platinum mine may close – Implats (27/08/09)

Implats managers draw line in the sand (27/08/09)

Strike costing Implats over R9m a day (28/08/09)

Accident to cost Impala R1.5bn (28/08/09)

Implats strike spreads, partially hits second mine (28/08/09)

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