LOOKING TO AVOID JOB CUTS

Platinum mining companies are having to take painful decisions to make operations resilient in the face of low prices, regulatory uncertainty, labour and community protests and an unclear demand outlook

In mid-july, CEOS of platinum companies in the Platinum Leadership Forum met mineral resources minister Mosebenzi Zwane behind closed doors. It sparked fears that they were there to warn of more retrenchments to come.

But Northam CEO Paul Dunne says the CEOS wanted to ensure that Zwane understood the difficulties the industry was experiencing and were “forthright” in making their case.

It’s a long list. Besides persistently weak platinum prices and a strong rand (now R13.36 to the dollar against R16-plus just 18 months ago), mines face rising uncontrollable costs (such as power), regulatory uncertainty around the Mining Charter and long-delayed amendments to the Mineral & Petroleum Resources Development Act (MPRDA). There are also costly disruptions in the workplace from Section 54 safety stoppages and labour and community protests.

“It was a positive meeting,” says Anglo American Platinum (Amplats) CEO Chris Griffith.

“We talked about what government, industry and labour can do. For example, we have been working for some time to persuade government to adopt a platinum Krugerrand. Through the World Platinum Investment Council we have achieved one in Austria and are working on a platinum Eagle in the US and platinum coins in the UK.”

Griffith says the CEOS also believe there is a case for the Reserve Bank to hold platinum as part of its reserve currency. “We feel the minister should be knocking on the door of treasury to make the case for the sake of the platinum industry,” he says.

The CEOS want regulators to ensure the platinum loading in autocatalysts is hiked, as SA is still on the Euro 2 standard.

At the same time, Joseph Mathunjwa, president of the Association of Mineworkers & Construction Union (Amcu), is planning to march to the Union Buildings to demand that government change trade agreements that let mining firms effectively export jobs by allowing them to use money generated in SA to buy offshore assets.

If local capital were used to build local industries, he says, it would be more focused

What it means: Optimism that platinum prices will rise may be holding back restructuring of loss-making shafts