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BusinessLive writes that the platinum price is likely to remain subdued until there is a reduction of primary supply from SA, but given the reluctance of the government and unions to agree to cutting jobs entailed in stopping unprofitable shafts, production has been kept relatively high.
A Bank of America Merrill Lynch report said on Monday that the concentration of ownership in the sector had diminished in time as Sibanye Gold bought the large Rustenburg mining complex from Anglo American Platinum as well as the whole of Aquarius. "Usually, a reduction of industry concentration is positive, because competition increases. Yet, in the case of platinum, it has, in our view, prevented a rebalancing of the global market for various reasons," the report said, singling out the Sibanye transaction. "This meant that especially the marginal Rustenburg operations, whose performance Anglo Platinum had been discontent with for years, have been sustained for now." The inability of mining companies to shut unprofitable production because of fierce opposition from the government and unions has meant "miners have sustained production to spread fixed labour costs over as large an output base as possible".
- Read this report by Allan Seccombe in full at BusinessLive
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