JOHANNESBURG (Reuters) - Anglo American Platinum (AMSJ.J), the world’s top platinum producer, said on Monday it was reducing its full-year production and project spending targets, hit by chronic weakness in prices and demand for the precious metal.
The miner also reported an expected 78 percent drop in interim profit.
The miner further cut its refined production target for 2012 to between 2.4 and 2.5 million platinum ounces, compared to an initial target of 2.5 to 2.6 million ounces.
Citing further market deterioration, it also slashed its project spending for a second time this year. Capital expenditure was reduced by another 700 million rand ($84.68 million), bringing its full-year project budget to 7.3 billion rand from the 9 billion it originally expected.
Amplats’ parent, Anglo American (AAL.L), kicks off the reporting season for mining heavyweights on Friday and Amplats’ output forecast will be scrutinized to see what it might bring to the global giant’s shrinking bottom line after its diamond and iron ore units posted lower profits.
Amplats had already flagged the fact that its first-half earnings would fall sharply as it grapples with soaring costs and other challenges. Its diluted headline earnings per share fell to 272 cents from 1,232 cents a year earlier.
Headline EPS is the main profit measure in South Africa and excludes some one-time items.
Amplats had high drama last week with the abrupt departure of chief executive Neville Nicolau after the profit warning was issued.
Anglo is the only mining major with a big exposure to platinum and is undertaking a strategic review of its operations in South Africa, home to 80 percent of known reserves. ($1 = 8.2660 South African rand)
Reporting by Sherilee Lakmidas; editing by David Dolan