Shares in speciality chemicals group Johnson Matthey raced ahead on Tuesday morning following the announcement by Amplats that it is to restructure its assets and embark on a cost-cutting programme.

Johnson Matthey, the world leader in platinum distribution and the sole marketing agent for Anglo American Platinum (Amplats), released a statement saying that it is looking at the "implications" that this shake-up may have on the companies' relationship.

Platinum prices were most likely the reason behind the move today, jumping to a three-month high after Amplats, the world's largest platinum producer, said that it would cut production.

As part of its restructuring, the Anglo American subsidiary said it would reduce output by 400,000 ounces per annum after putting four unsustainable, high-cost shafts at Rustenburg on long-term care and maintenance. It also said that its Union mines, which produced 254,000 ounces of platinum in 2011, are up for sale.

Analyst Alison Turner from Panmure Gordon said this morning that the Amplats review is "good' for the wider platinum sector and prices. She's said that restructuring will reduce world primary platinum supply by 7%.

"We were already positive on the outlook for platinum taking the view that the South African industry would not deliver production growth to meet recovering platinum demand.

"Following today's announcement from Anglo Platinum we now expect the market to move more rapidly to a larger and more sustained deficit position driving a sustained increase in the platinum price."

Johnson Matthey's shares were up 3.3% at 2,317p by 10:16 in morning trade, helped by a target price upgrade by Bank of America Merrill Lunch from 2,375p to 2,500p. The broker retained its 'neutral' rating for the stock.

Other big players in the platinum industry, such as Lonmin and Aquarius were also making impressive gains on the market, up 4.66% and 8.19%, respectively.

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