South African mining company Impala Platinum Holdings Ltd. (JNB:IMP), the world's second-largest platinum producer, fired 17,200 workers this week following illegal strikes at its Rustenburg mine.
The company has around 46,000 workers at the South African mine, one of largest producers of the metal, with 941,000 ounces produced last year.
Rock drillers refused to work in January over salary disputes and declined to involve the National Union of Mineworkers.
The manner in which these concerns were raised was unacceptable, said Impala in a statement, adding that engaging in talks without the NUM breach trade agreements. Impala obtained a two court interdicts declaring the work stoppage illegal, but workers continued striking.
The company began dismissing workers but allowed them to reapply for jobs. Halted platinum production is costing the company around 3,000 ounces of production each day, or around $4.9 million in sales, according to Bloomberg. The stoppage follows previous delays, and puts additional pressure on the company's performance.
We note that the company has been negatively impacted by safety stoppages and project delays over the past several quarters; double digit wage inflation has been a further pressure point, wrote Deutsche Bank in a research note on Friday.
But Impala projected that its earnings per share would increase by 552 to 587 South African rand, thanks to a weakening in the dollar exchange rate and accounting adjustments.
The company reports earnings for the last six months on Feb. 16.
Shares of Impala were up 0.58 percent to $22.45 Friday afternoon.