Impala warns of plunge in earnings Impala Platinum warned on Monday that it expected its earnings for the six months to the end of December to plummet by more than two-thirds as it became the latest producer of the precious metal to highlight the industry's problems. The world's second-largest platinum producer said it was forecasting headline earnings per share for the period to be between 120 cents and 138 cents, up to 79 per cent lower than in the same period in the previous financial year. It blamed the sharp fall in earnings on decreased output, rising costs and a writedown of R603m. The platinum industry, which is predominantly based in South Africa, has been struggling for more than a year with a subdued pricing environment, industrial unrest and spiralling costs driven mainly by wages and electricity increases. Impala managed to avoid the weeks of wildcat strikes that erupted in the sector last August, but it did give its employees a salary increase to appease restless workers that added 4.8 per cent to its wage bill - its second wage hike in 2012. It was also hit by a six-week wildcat strike that ran from January to February last year, in a sign of what was to come for the industry. Last month, Anglo American Platinum, the world's top producer of the metal, announced drastic restructuring plans that include the closure of two mines and plans to sell off another mine complex. It said the proposals, which could lead to up to 14,000 job losses, were necessary to ensure the company's survival, but its plans triggered a backlash from the government. Amplats reported an annual operating loss of R6.3bn ($705m) this month, which contrasted with a R7.97bn profit in 2011. There are also concerns that there could be further shaft closures and job losses in the sector, as mining houses face the prospect of more electricity tariff rises and two-yearly wage negotiations this year. South Africa is home to about 80 per cent of the world's proven platinum reserves. The platinum price has risen since last year's industrial unrest, hitting a four-month high this month and trading around $1,700 a troy ounce, as production was hit and companies have announced cutbacks in capital expenditure. But the industry remains heavily exposed to Europe's economic woes, as one of the main uses of platinum is in catalytic converters for the car industry.