SouthAfrica.info (Johannesburg)

21 February 2013

South Africa: Platinum Dominance 'Crucial for SA'

Photo: Amplats
Khomanani platinum mine in South Africa.

It is imperative that South Africa retains its position as the world's number one platinum producer, that stability is restored to the production cycle, and that investor confidence in the industry is repaired, says Chamber of Mines chief economist Roger Baxter.

Briefing Parliament's portfolio committee on mineral resources in Cape Town on Wednesday, Baxter said the platinum sector, the biggest component of South Africa's mining industry, needed all stakeholders to play a role in contributing to community development and promoting the concept of beneficiation.

Also present at Wednesday's parliamentary hearing were trade unions the National Union of Mineworkers (NUM) and Solidarity, and the Platinum Group Metals Company.

Biggest player in SA mining

The platinum mining sector is the biggest player on the South African mining scene, each year producing around 289 tons of platinum valued at R84-billion, employing around 195 000 people and paying them R30.4-billion in salaries and wages.

The industry also pays around R7.3-billion in corporate taxes annually, while investing around R500-million in communities every year.

Baxter said it was a "critical time" for South Africa's platinum sector, which was facing tough challenges, including the plans announced by Anglo American Platinum (Amplats) to cut 14 000 jobs in Rustenberg.

Industry under pressure

Other pressing issues included falling demand for the commodity, rapidly escalating input costs, falling productivity and illegal strikes. Combined, these factors had pushed 59% of the platinum mining industry into a marginal or loss-making position, Baxter said.

The increase in the price of electricity sought by Eskom, if granted, would add further pressure, resulting in a combined 587% hike in electricity prices over the past 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.

Illegal miners' strikes in 2012 had severely exacerbated the situation, and strike action in 2013 could further undermine the sector, Baxter said.

NUM calls for 'mining peace accord'

The NUM proposed that President Jacob Zuma be asked to initiate the development of a "mining peace accord".

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

SAnews.gov.za

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