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 per cent 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 per cent 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 per cent 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 northwest of Johannesburg. —Reuters