Minister puts party above platinum jobs

THE platinum industry is in crisis mode, with many companies acting to stem losses. Eastern Platinum has suspended work on a big new mine and is looking at trimming workers from its Crocodile River operation. Aquarius Platinum has shut its Marikana mine and the concentrator it shares with Anglo American Platinum. The latter, the world’s biggest platinum producer, is reviewing its business, intent on restoring profits, and the move may lead to casualties in its joint ventures with smaller firms.

Mineral Resources Minister Susan Shabangu concedes there is a problem in the industry. Three months ago she appointed a task team drawn from her department to study the matter. The report is on her desk. Yet Ms Shabangu says it will only receive her full attention when the African National Congress (ANC) policy conference, which starts on June 26 and continues to the end of the month, has been concluded.

Surely that’s not the correct response. The minister’s primary duty is to the portfolio she is overseeing. She should be dealing with the sectors within it that are in serious trouble and threaten the government’s stated intention of growing the economy and employment.

Yes, the ANC is thrashing out a new minerals policy for the country. But should that be Ms Shabangu’s primary focus at this point?

The platinum sector needs to see something done urgently to ameliorate the rampant cost environment and counteract the stagnant rand platinum price.

The industry cannot afford to wait while the ideologues argue the toss. A plan of action needs to be drawn up immediately or there will be more casualties in platinum mining, and yet more job losses.

SA’S inclusion in Citigroup’s world government bond index — the first ever African country and only the fourth emerging market to qualify — is something of a feather in our cap. It means the criteria for membership of the bonds “champions’ league” have been met consistently for several months, and international tracker funds that are not already doing so will be required to invest in South African bonds.

Apart from the prestige associated with inclusion in the index, which is tracked by funds worth an estimated $2-trillion, the influx of money should help push yields lower and thereby lower SA’s cost of borrowing. Indeed, more than R20bn has flowed into the market since the probability of SA’s inclusion was revealed in April, and the yield on the 2026 bond has fallen considerably.

However, this is not a ticket for the government to rest on its laurels. Standard & Poor’s and Moody’s have both put SA’s sovereign debt on negative watch and bond yields have started rising again, a timely reminder that fiscal prudence and careful debt management are the only way to ensure government borrowing remains affordable.

Dave Marrs edits Company Comment (marrsd@bdfm.co.za)