Amplats, majority owned by Anglo American, is to shed 14,000 jobs in South Africa, mothball two mines and put another up for sale.
Two mines in Rustenburg - Khuselka and Khomanani - would be put on long term care and maintenance, while the Union mine would be sold. The company said the plans were vital to save the company.
The decision to cut back follows a drop in the price of platinum and soaring costs. But it could provoke another series of strikes following violent protests last year, even though the company said it hoped to create as many jobs in the area as those lost under the restructuring.
Anglo American, which owns 80% of Amplats, recently announced Mark Cutifani would take over as its chief executive from Cynthia Carroll in April.
Investors seemed to welcome the news, with Anglo American's shares currently 10.5p better at £20.47.
Johnson Matthey - which refines and recycles platinum group metals - added 55p to £22.98 as it said it would consider the implications of Amplats' plans on its relationship with the company. Credit Suisse said:
We calculate a total 15% cut on Amplats production (400koz) will hit [Johnson Matthey] by around £2m due to lower marketing commissions. We believe the net effect on refining will be neutral with less mined volumes (14% inputs) but more recycled product (75% inputs).
But [this will be] offset by positive pricing impacts: A 10% increase in the basket of precious metals has a £8m or so benefit on earnings before interest and tax.
The news has lifted other platinum producers, with Lonmin up 15.9p at 348.5p and Aquarius Platinum adding 7p to 72p.
Elsewhere Rio Tinto has risen 17.5p to £34.91 after its iron ore output reached 253m tonnes last year, up from its previous estimates of 250m tonnes. Canaccord Genuity said:
Overall the strong iron ore production should be taken positively in our view. Likewise, the substantial pick up in Escondida mined volumes bodes well for 2013. However, we note that the copper unit did miss its 2012 guidance. Given the strong rally into the year end, we are not surprised to see the shares pause for breath in early 2013. However, we note the current higher iron ore price of $150 is well above the consensus average of around $120 for the first quarter, suggesting there may be some upward bias to earnings changes in coming weeks.
