A WEAK earnings forecast from Anglo American Platinum (Amplats), the world's largest platinum miner, sparked a sell-off in the company's stock on the JSE on Monday.
The sector is battling high costs, labour unrest, stagnant prices and an oversupplied market. Royal Bafokeng Platinum and Aquarius Platinum last month announced huge curtailments of their operations.
By 3.54pm local time on Monday, Amplats was not far from a one-year low after a drop of R19,98, or 4,12%, from Friday's close of R464,81 a share.
Earlier in the day, the company said it expected its earnings to fall by more than 20% in the six months to the end of June, compared with the same period a year ago.
The expected decrease was primarily due to lower sales volumes and lower metal prices, the group said.
In the trading update, Amplats advised its shareholders that it would issue a further trading statement in due course to provide earnings forecast ranges for earnings per share and headline earnings per share.
Chris Gilmour, investment analyst at Absa Asset Management, said conditions in the mining sector remained toxic in light of the high operating costs, a surplus of above-ground inventory and weak metal prices.
"Everybody is taking a knock in the platinum sector. The outlook for platinum is very deadly, in that if one were to bring in a new mine, one would have had to produce at a loss," Mr Gilmour said.