Glencore to shut struggling Eland platinum mine

GLENCORE would shut its Eland platinum mine in South Africa, risking about 1 000 jobs, the Solidarity trade union said.

“We treat every mine closure as a permanent closure and the jobs are lost forever,” Solidarity general secretary Gideon du Plessis said.

“The non-profitability of the mine, expensive and unreliable electricity and low commodity prices were their main reasons,” he added.

The company was in the process of reviewing the operation because of “ongoing poor market conditions in the platinum sector and difficult operational conditions at the mine”, said Glencore spokesman Gugulethu Maqetuk.

It had issued notices about possible job cuts to unions, Maqetuk said.

Falling commodity prices and rising costs have forced platinum producers including Anglo American and Lonmin to consider job cuts.

Solidarity estimated the mining industry in South Africa, the world’s biggest producer of the metal, might lose almost 20 000 positions, it said in a report yesterday.

One in every four South Africans is unemployed.

Lonmin, the third-biggest prodcuer of the precious metal, said last month that it would reduce annual production by 100 000 ounces over the next two years and eliminate as many as 6 000 jobs.

Platinum has been in a bear market for two years, and South African producers are losing money on three out of every four ounces they mine.

Prices have plunged 17 percent this year as a result of a glut of metal from stockpiles and recycled material.

“If a mainstream mining operator cannot make it work, we can’t see that a junior miner can turn it around,” Du Plessis said. “The turning point will come when a sufficient number of platinum mines close down to reduce the oversupply of platinum in the market.”

Glencore distributed its 23.9 percent stake in Lonmin to shareholders in June.

It’s current platinum assets comprise Eland and the Molotolo venture with Anglo American Platinum in South Africa.

Glencore produced 157 000 ounces of platinum and related metals last year, according to its annual report.