Wednesday, 25 June 2014

Is South Africa's precious metals era drawing to a close?

Last year I reported on South Africa's decline as a major gold producer (posting of 25th September 2013), from being the number 1 producer a decade ago to now number 6 in the world rankings.

Is platinum, of which South Africa has 90% of the world’s deposits, set to go the same way as the country's ageing, deep gold mines? This is the question asked in African Mining Brief, reporting on a recent University of Cape Town Graduate School of Business round table.

The current mining strike, which ends today, is the latest challenge to beleaguer South Africa's battered and once hugely profitable platinum industry. After 2008, South Africa, the world’s largest producer of platinum, was hard-hit by the global recession and erosion of the market for platinum and its by-product, rhodium. Making a recovery, it has since been knocked by a surge in the scrap supply and the recycling of platinum by other producers, as well as by palladium, produced largely by Russia, and used as a platinum substitute catalyst notably in the auto industry. The current platinum strike has been the longest and most expensive strike in South Africa’s mining history, with some 70,000 miners now returning to work after downing tools on 23 January 2014, costing mining firms R19 billion in lost revenue, miners approximately R8.8 billion in wages and the country's GDP a drop of 0.6% in the first quarter.

Platinum itself is extremely labour-intensive to mine in deep shafts and complex to process and the panel forecast that opencast mines, which are low in investment but high in environmental impact, and mechanisation, lie ahead, a shift away from traditional labour-intensive shaft mining.

All in all the future looks bleak for South African mining, vindicating our decision to move MEI's Precious Metals '15 to Falmouth, close to the rapidly evolving European precious metals producers.


  1. The last comment here is a bit of a slap in the face for the South African platinum and precious metals industry. An industry that has given you much support over the years deserves better and more supportive commentary than this

    1. This is not meant to be a slap in the face, Anon (if you reply could you leave your name and affiliation?). The posting was a summary of a panel discussion at UCT, published in African Mining Brief. And yes, the South African precious metals industry have supported us and hopefully will continue to attend our conferences, but the unfortunate fact, which must be faced, is that the industry in RSA is on the wane, and yes, that is why we felt we had to move the Precious Metals conference to Europe.

      We had a thriving tin mining industry when I came to Cornwall in the early 1970s, but this no longer exists, nor does the UK's once major coal mining industry. A sad fact of mining- things move on.


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