* Review to be unveiled on Tuesday
* Union mine likely to be sold or shut-source
* Strikes led to 306,000 oz of lost production
* Review could lead to shaft closures, provoke labour unrest
By David Dolan and Sherilee Lakmidas
JOHANNESBURG, Jan 14 South Africa's Anglo
American Platinum is likely to sell or shut its Union
mine as part of a review of its platinum business by parent
Anglo American, a person familiar with the matter said.
Anglo American will announce a revival plan for its platinum
arm Amplats on Tuesday, a spokeswoman said. The world's top
producer of the precious metal also said on Monday it likely
fell to a full-year loss because of costly strikes.
The review had widely been expected to lead at least some
shaft closures due to soaring costs and falling profits.
But closures could risk a new wave of labour unrest, with
the militant Association of Mineworkers and Construction Union
(AMCU) threatening to close operations like it did last year if
the review leads to shutdowns and job losses.
The Union mine, which is 85 percent owned by Amplats, is
likely to be the "most dramatically affected" by the plan, said
the source, who declined to be identified because the
information is not yet public.
Amplats is unlikely to make sweeping changes at any of its
100 percent owned mines, said the source.
Union produced 254,000 ounces of platinum in 2011 and
employs around 7,800 people. It is divided into Union North and
Union South and one analyst said the northern wing was less
profitable and the most likely candidate for closure.
A spokeswoman for Amplats said the review was due to be
announced on Tuesday, but declined to comment further.
Shaft closures could reignite violence along the platinum
belt. Violence linked to wildcat action on South Africa's mines
last year killed around 50 people.
"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 in Johannesburg.
Amplats said on Monday it lost 306,000 ounces of output last
year - about 12-13 percent of expected production - due to
illegal strikes which were part of a wave of labour unrest that
hit many of South Africa's gold and platinum mines.
Froneman and other analysts expect Amplats to close shafts
that produce about 200,000 ounces per year, though the cuts
could be deeper and might also focus on struggling mines around
the restive platinum belt city of Rustenburg about 120 km (70
miles) northwest of Johannesburg.
Evans Ramokga, an AMCU organiser based in Rustenburg, told
Reuters that the rank and file could accept the sale of assets
as such a move could preserve jobs but would react to closures
with sympathy strikes on other shafts.
Unions and the company will meet to discuss the results of
the review on Tuesday.
Closing Amplats' shafts could help lift the spot price of
the white metal, which is used in auto catalysts to reduce
Amplats accounts for about 40 percent of the global supply
of platinum, whose price has tumbled since 2008, mostly because
of sluggish car demand in Europe.
Platinum prices hit a three-month high on Monday as
speculation about further supply outages in major producer South
Africa sparked buying, pushing the metal back towards parity
With Amplats' Rustenburg operations employing close to
20,000, closure of two of the more labour-intensive mines could
translate into job cuts of up to 10,000.
The review was commissioned almost a year ago and Anglo has
three broad options: it can spin off Amplats; it can do little
and hope profits rebound; or it can close loss-making shafts to
create a nimbler, profitable business.
Monday's trading update highlights the difficulties it
Amplats said it expected to report a headline loss of 491 to
628 South African cents per share for the year ended December,
compared with a profit of 1,365 cents a year earlier.
A poll of 10 analysts by Thomson Reuters forecast earnings
of 190 cents per share for diluted headline earnings, meaning
the market had expected the company to eke out a small profit
for the full year.
Amplats' share price was down almost two percent in
afternoon trade. In addition to lower sales, Amplats said it was
also hit by a decline in platinum prices.
The company said it would also write down the value of some
projects not considered economically viable by 6.6 billion rand