Amplats, the world’s biggest platinum producer, issued a profits warning after its business was disrupted by violent strikes in South Africa.
Headline earnings per share for 2012 are set drop to a loss of between 491 South African cents (35p) and 628 cents, from a profit of 1,365 cents in 2011, the company said.
The shares fell as much as 3.4pc to 483 rand in Johannesburg on Monday, as the market had expected the company to managed a small profit despite recent upset to production. South African’s platinum belt was last year the backdrop for the worst violence since apartheid, closing many mines and halting output.
Amplats blamed its profit warning on falling sales due to the production turmoil coinciding with an environment of lower prices, due to weakened global demand.
“Platinum sales volumes for the period were lower primarily due to the two-month illegal industrial action experienced during the second half of 2012,” it said. The lost production amounted to 306,000 oz, representing around 12pc of expected output.
The company also wrote down by 6.6bn rand (£470m) the value of assets that are “not in use,” and “which are considered not economically viable in the current market environment”.
Amplats, or Anglo American Platinum, is majority owned by FTSE 100 (FTSE: ^FTSE - news) mining giant Anglo American (LSE: AAL.L - news) , which is poised to unveil a review of the platinum division within days.
The market expects moves to cut production across its higher-cost mines by around 200,000 ounces a year, but questions surround Amplats’ ability to reduce costs given the charged labour relations backdrop in its country of operation.
"We remain concerned regarding the company's ability to initiate operational changes given the current South African social and political environment," said Justin Froneman, a platinum analyst at SBG Securities.
Amplats reports its full-year results at the start of February.