The Minerals Council of South Africa has revealed that the restructuring of the country’s platinum group metals (PGM) industry could potentially result in the loss of between 4,000 and 7,000 jobs.
The discussion around restructuring stems from the need to address unprofitable production amidst declining metal prices and high input costs in the South African PGM sector. This issue was highlighted at the onset of the Investing in African Mining Indaba conference in Cape Town.
The sector, which heavily relies on automakers utilising PGMs to reduce emissions in petroleum-powered engines, faces significant uncertainty as the global focus shifts towards clean energy in transportation.
South Africa, being a top global PGM producer, operates some of the world’s oldest and deepest platinum mines, which incur high operational costs, particularly during periods of low metal prices.
Last year, the prices of palladium and platinum dropped by 40% and 15%, respectively, primarily due to weakened demand in China.
According to the Minerals Council, electricity and labour costs constitute the majority of PGM miners’ total expenses. Consequently, several prominent PGM miners are considering restructuring their operations, potentially leading to the loss of 4,000 to 7,000 jobs.
Sibanye Stillwater, South Africa’s largest mining sector employer, has proposed restructuring that could involve the closure of four unprofitable PGM shafts, potentially affecting 4,095 jobs.
Similarly, Impala Platinum has initiated voluntary job cut offers to workers at its South African operations, while Anglo American Platinum, the world’s largest PGM producer by value, is reassessing its cost structure to ensure profitability.