“Ramaphoria” boosted the rand and revived investor sentiment on South Africa. But deep underground in the country’s platinum mines, there’s very little cause for optimism.
Producers in South Africa, which accounts for about 70 percent of the world’s mined platinum, are closing shafts and cutting thousands of jobs as a stronger rand combines with stagnating prices for the metal in squeezing profit margins.
The future looks equally bleak, as reduced demand for diesel engines and the rise of electric cars threatens to erode the need for the metal used to cut pollution.
“The industry is going to shrink in size until there is a new source of demand,” said Natixis SA senior commodities analyst Bernard Dahdah. “We are likely to see more operations close.”
Further losses in the platinum sector, a top export earner, will add to pressure on President Cyril Ramaphosa as he seeks to kick start an economy that’s currently projected to grow just 1.5 percent this year and drive down a 27 percent unemployment rate.
For the rest of this article: https://www.bloomberg.com/news/articles/2018-03-26/shrinking-platinum-sector-adds-to-ramaphosa-s-economy-challenge