SA must remain dominant platinum supplier

Wednesday, February 20, 2013

Cape Town – It is imperative that South Africa holds its dominant position as a platinum supplier; stability is restored to the production cycle and investor confidence in the platinum mining industry is repaired.

This is according to Chamber of Mines Chief Executive Roger Baxter who said that the sector, the biggest component of South Africa’s mining industry, needed all stakeholders to play a role in contributing to community development and the concept of beneficiation must be promoted.

Baxter on Wednesday made a presentation to the Portfolio Committee on Mineral Resources in Parliament. Also present at the hearing were trade unions National Union of Mineworkers (NUM) and Solidarity, and the Platinum Group Metals Company.

He said it was a “critical time for the platinum sector” which was facing tough challenges. “The situation is challenging for a country which still is the world’s number one platinum producer.”

One of the challenges were the plans announced by Anglo American Platinum (Amplats) to cut 14 000 jobs in Rustenberg.

The platinum mining sector is the biggest player on the South African mining scene. It produces 289 tons of platinum, valued at R84 billion, employs 194 979 people, and pays them R30.4 billion in salaries and wages.

The industry also pays R7.3 billion in corporate tax, while R500 million is invested in communities.

Among the pressing issues faced by the industry was the falling demand for the commodity, rapidly escalating input costs, falling productivity and illegal strikes. Combined, these factors pushed 59% of the platinum mining industry into a marginal or loss-making position.

The increase in the price of electricity sought by Eskom, if granted, would add further pressure. The sought-after increase would result in a 587% hike in price in 11 years.

“The platinum industry cannot afford this rate of increase. The industry is at a tipping point and it will push more of the industry in the red,” Baxter said.

The illegal miners’ strike in 2012 “exacerbated the situation’’. The Marikana tragedy, in which 34 lives were lost, led to a loss of R10 billion in revenue. More strike action in 2013 could further undermine the sector, Baxter said.

NUM proposed that President Jacob Zuma be asked to initiate the development of, signing and adherence to a Mining Peace Accord.

All unions and employer organisations should participate in this process, which would form a platform to publicly denounce violence, anarchy, intimidation and killings as a form of organizing, union recruitment or collective bargaining.

Committee chairperson Gona said: “This meeting has been long overdue, given the crisis in the platinum sector. We get concerned when we hear of the problems that are said to be developing in the platinum sector knowing very well that this country is endowed with platinum. That mining industry has played a pivotal role in employment in this country.”  -