BL Premium writes that a hard-hitting report from JPMorgan Cazenove indicates that mine closures, job losses and the cutting of hundreds of thousands of platinum ounces will be forced on SA’s beleaguered platinum sector.
While Mineral Resources Minister Gwede Mantashe said at a recent platinum conference that there was no crisis in the sector, the report shows just how dire the situation is for SA miners and predicts that the expected cuts in production would come in the second half of 2020 as efforts to keep unprofitable mines going at enormous expense fail. The report dealt with Anglo American Platinum, Impala Platinum (Implats) and Northam, but did not take into consideration Lonmin or Sibanye-Stillwater. Platinum mines employ about 170,000 people, down from 199,948 a decade ago. Lonmin is embarking on cutting 12,600 jobs as it closes old mines, while Implats is reviewing mines in its flagship Impala Lease Area near Rustenburg as it accelerates the closure of old mines. The report predicts there could be "substantial supply cuts" after 2019, "which could have a transformational impact on South African supply." Yet, a platinum executive said the authors of the report appeared to be working on the assumption that platinum companies would do nothing to address losses at their mines and would cut costs to save jobs in a volatile part of the country. Mining companies were acutely aware social unrest could be triggered by indiscriminate job cuts and mine closures, he stated.
- Read this report by Allan Seccombe in full at BL Premium (paywall access)
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