Tuesday, 18 September 2012
What is the atmosphere like at the 5th Platinum Conference?
Although the price of platinum has been rising over the past month, and is now close to its peak of 12 months ago, the last few weeks have been turbulent times for the metal, particularly in South Africa, the world’s largest producer.
As the five-week bitter strike at Lonmin’s Marikana mine continues, the company has announced that it has stripped its top executives of part of their long-term bonuses. Anglo American suspended production at its mines near Marikana last week due to what it described as violent intimidation of its workers, but it expects to resume operations today.
Ironically, today is also the start of the SAIMM’s 5th Platinum conference at Sun City, with the theme ‘a catalyst for change’. It would be interesting to hear the views of those who are attending, particularly the reaction to this morning’s keynote lectures “Platinum- an industry of challenge and opportunity” and particularly the very topical “Leadership will be the difference between good and bad change”.
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Barry, I have just returned from SAIMM "Platinum - A Catalyst for Change". I will try to make a short summary as you requested, but it will not do justice to the excellent presentations. I will cover the keynotes first and the Minerals Processing later within the HTML character limitations.
ReplyDeleteThe Keynote Addresses focused on the socio-economic and political challenges. The recent, tragic events at Marikana showed that factors beyond the technical will shape the South African Platinum industry’s future.
ReplyDeleteSouth Africa remains the world’s major source of platinum group metals. The auto catalyst market is a main driver for platinum. Ruthenium is essential in high capacity hard disk drives and iridium crucibles are used to manufacture crystals for advanced LEDs. Uncertainty over supply from South Africa will encourage substitution.
The platinum industry contributes significantly to South Africa’s GDP and exports, and employs almost 200,000 people.
The South African platinum industry is facing a multitude of challenges. One speaker described the industry as “bleeding to death”. Grades are lower as Merensky reef is depleted and more UG2 is mined. Mines are deeper and more complex. Costs have increased faster than metal prices. It is estimated that 30% of South African platinum mines are currently uneconomic. This will increase as large wage demands are met.
Labour unrest is not the only problem. Following peak platinum production in 2006, over 1M Oz was lost between 2007 and 2009. Different causes were dominant in each year, and included economic reasons, “unforeseen events” (such as flooding and smelter fires), maintenance, power shortages and compulsory safety stops. These losses are disproportionate to other countries, suggesting there is scope for improvement in South Africa. While other mining countries increased production during the “mining boom”, South African production contracted. Foreign investors are now reluctant to accept the uncertainties in South Africa.
A presentation showed that since 1980 salary increases globally have fallen behind their historic alignment with productivity increases, breaking an implicit agreement between business and labour. In many countries, not just South Africa, this is reflected by actions against “elites” including “The Arab Spring” and the “Occupy” protests. South Africa’s platinum mines are in poorer regions of the country with low educational levels and high unemployment. The point was made that those with nothing to lose will lose nothing by using violence to improve their situation.
Another address covered the history of mining unrest in South Africa, and drew parallels between the 1922 Rand Revolt and Marikana in 2012. In both cases protests were crushed violently, and people lost faith in their once popular leaders.
More recent factors were also blamed for the road to Marikana. South Africa scores badly in key components of the World Economic Forum’s “Global Competitiveness Report”. Several speakers criticised policymaking and failure to implement policy by the South African Government. It was stated there is distrust between Government and business, resulting in Government doing what business should be doing, and expecting business to fulfil some of the roles of local government. It was suggested that although a lot has been achieved in South Africa, it is not enough to meet the expectations of the poorest.
The speakers remained optimistic that solutions can be found to the platinum industry’s problems. They agreed that poverty, unemployment and inequality must be addressed in an atmosphere of peace and sustainability. There were calls for sustainability to be redefined in the platinum industry. It was suggested that reactive Corporate Social Responsibility projects should be replaced by proactive and inclusive “Shared Vision” processes agreed between stakeholders. Royal Bafokeng may provide a model. Speakers also suggested there is scope for much greater collaboration between platinum companies in R&D, safety and project development to avoid unnecessary duplication. Best practice should also be shared with other sectors of the South African mining industry to improve efficiency and drive down costs.
I do not have figures for attendance at previous SAIMM Platinum conferences, but there appeared to be fewer delegates at this year’s event than I remember from other years. I counted approximately 275 on the delegates list, with main groups from Equipment and Service Suppliers (103), Mining Companies (69), Engineering Companies (32) and Research 24. The venue, the quality of the presentations, and the opportunity to reunite with old friends and make new ones created a positive atmosphere, despite recent events in the platinum industry.
ReplyDeleteI attended the Keynote Addresses and the Minerals Processing sessions. There were good, practical papers on plant scale flotation optimisation, automation and remote monitoring of plants, physical beneficiation and dense media pre-concentration of mechanically mined reef, fully autogenous grinding, hybrid flotation banks for fine and coarse recovery, mining and minerals process optimisation, and dynamic stockpile models, amongst others.
Many thanks for this comprehensive report Ian. This is most appreciated. November's Precious Metals '12 will also be interesting!
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