Impala Platinum earnings drop 58 percent

Johannesburg (AFP) - Impala Platinum, the world's second biggest platinum producer, announced Thursday that its full-year profit slumped by 58 percent, as the industry suffers from the global decline of commodity prices.

The Johannesburg-based company has been hit by China's economic slowdown, which spooked stock markets worldwide in recent weeks and sparked a rout in emerging market currencies.

Earnings in the 12 months ended June 30 fell 58 percent from a year earlier, to 221 million rand ($16.2 million), Implats said.

Profits were also hit by efforts to recover from a damaging five-month strike last year.

"The recent sharp decline in... prices has compounded the impact of the prolonged strike in 2014, which had a material negative effect on the group's overall financial position," the company said.

Platinum prices have dropped by about 40 percent since 2011, and are at their lowest in six years.

"Slowing Chinese GDP growth and economic uncertainty in the 2014 calendar year impacted platinum jewellery sales," the company said.

Despite weak demand, the company said it will continue to invest in new shafts as it forecast long-term demand for platinum-group metals.

The results were further bad news for the South African economy, which has been battered by electricity shortages and unemployment of about 25 percent, as well as the commodity slump and falling rand.

Mining giants Lonmin and Anglo American have announced plans to reduce their workforce, with trade unions warning 19,000 job cuts could already have been scheduled.

The government, mining companies and unions met on Monday in an attempt to negotiate a reduction in redundancies.