Chromium/Platinum Group Metals

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(Reuters) – Labour brought a machete to a gunfight with management in South Africa’s platinum belt. Small wonder it looks set to lose.

South Africa’s big platinum strike has highlighted issues ranging from cash reserves to changing market dynamics that have curtailed labour’s ability to influence prices. The result has been to expose the weakness of the country’s miners in any confrontation with producers.

As it marked its 13th week, the showdown took a dramatic turn on Thursday when marathon wage talks collapsed. The world’s three top producers now say they will take their latest offer directly to employees.

They are effectively forcing the hand of the hard-line Association of Mineworkers and Construction Union. The AMCU’s leaders were reluctant to take the latest offer back to their members – probably because they feared the rank and file would accept it after three months with no pay.

A typical South African mine worker has eight dependants and often two families, one in his home village and the other near the shafts. That means many of them are now near the breaking point, especially as domestic inflation accelerates.

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JOHANNESBURG (miningweekly.com) – The prolonged strike of the Association of Mineworkers and Construction Union in the platinum belt is highlighting the colossal potential opportunity loss to the South African economy should the country lose out on its platinum patrimony, which has an amazingly bright latent future.

Platinum has the potential to tick all the important economic boxes for a South Africa that is striving to add maximum value to its metals and minerals. A fuel cell industry, with platinum at its heart, would support South Africa’s drive for economic growth and jobs. Early projections point to massive future global demand for platinum, but blurring the metal’s great potential future are concerns around security of supply.

Hydrogen South Africa (HySA)/Catalysis, a project backed by the South African taxpayer and co-hosted by the University of Cape Town and the State-owned Mintek, estimates that future global demand for platinum catalysts in fuel cells – at only 0.1 g for every kilowatt of output – would absorb South Africa’s entire current platinum mining capacity.

“When the fuel cell technology industry takes off, it’s going to be a multibillion-dollar market,” says HySA/Catalysis Centre of Competence director Dr Olaf Conrad, who, with HySA/Catalysis key programme manager Dr Sharon Blair, spoke to Mining Weekly Online from Cape Town.

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South Africa’s platinum strike could be a blessing in disguise for mining companies making the case for closures of unprofitable operations.

LONDON (MINEWEB) – One doesn’t have to be too much of a cynic to feel that the 11 week platinum miners strike primarily affecting the underground mines around Rustenburg may prove to be be a long term positive game changer for the main platinum mining companies – and Anglo American Platinum (Amplats) in particular. The world’s largest platinum miner was already struggling with the profitability of its highly labour intensive Rustenburg area platinum mines and had already proposed a mine and shaft closure programme to try and rationalise its operations and bring them into decent profitability.

Indeed its proposals of a little over a year ago involved the potential rationalisation of its Rustenburg operations into three mines – Thembelani, Siphumelele and Bathopele which between them have five shaft systems primarily working the narrow highish grade Merensky reef systems.

This would mean putting two more mines – Khuseleka and Khomanani – with four shaft systems, on long term care and maintenance with the possible loss of up to 14,000 jobs, although the company said it would have hoped to replace most of these over time with initiatives to generate new non-mining business opportunities in the area.

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[miningmx.com] – THARISA Minerals is the latest company to roll off the conveyor belt of the Pouroulis family, led by patriarch, Loucas Pouroulis.

A Cypriot by birth, Pouroulis came to South Africa after having been trained in metallurgy at the University of Athens. Mining was in his blood: his father was a copper miner in Cyrpus; the Pouroulis family lived near one of the mine’s slag dumps.

There is now, however, a third generation of Pouroulis’s plying their trade in the sector. Loucas’s eldest son, Adonis, is the chairman of the UK-listed Petra Diamonds whilst his brother, Phoevos, heads Tharisa, which is platinum/chrome miner. In truth, the Pouroulis family has an abiding obsession with mining platinum.

Loucas Pouroulis’ first encounter with platinum – Lefkochrysos – was unkindly referred to as Lefko-‘crisis’ following a decline it the platinum price around 1987 which left the elder Pouroulis’ plans in tatters. He went on to run Consolidated Modderfontein, a gold mine, before exorcising the ghost of Lekkochrysos after founding the breathtakingly successful, Eland Platinum.

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JOHANNESBURG/LONDON, April 8 (Reuters) – As a strike by South African platinum miners enters its eleventh week, the likelihood that employers will bow to demands for better pay is receding and a drastic overhaul of the loss-making industry is looking more inevitable.

Faced with the tough bargaining stance of the Association of Mineworkers and Construction Union (AMCU), the companies appear increasingly likely to close or sell mines that are bleeding cash while they lie idle.

Before the strike began, around half of the country’s platinum shafts were losing money because of rising energy and labour costs and waning demand for the metal, used mainly in jewellery and in catalytic converters for cars.

To pacify AMCU, Anglo American Platinum, Impala Platinum and Lonmin would have to double entry-level pay over the next three years to 12,500 rand ($1,200) a month – a demand they flatly refuse. The industry has idled some production to shore up margins, but held back from tougher cuts for fear of a political backlash that could compromise its wider interests.

But the miners’ strike, the longest and most damaging in South Africa in decades, has now cost the industry over $1 billion in lost revenue and there is a growing sense that the companies have little to lose.

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MARIKANA, South Africa, April 4 (Reuters) – Shad Mohammed’s electronics and household store in South Africa’s platinum belt has survived a series of mining strikes over the 14 years it has been serving customers in the dusty town of Marikana.

Yet with the latest stoppage now in its 10th week, he has sold just 10 phones instead of well over 100, and has had to branch out into deliveries to avoid giving up and going home to Pakistan, another statistic in a devastating industrial dispute. “Our business is totally dependent on the mine workers,” Mohammed, 38, said among shelves filled with cell phones, laptops and large pots. “If they don’t work we really suffer.”

Members of the Association of Mineworkers and Construction Union (AMCU) have downed tools at Lonmin, the main employer in the tough town of Marikana, and rivals Anglo American Platinum and Impala Platinum in a strike over wages, hitting 40 percent of global production.

The stoppage shows no sides of ending with the two sides still poles apart. AMCU wants a basic-entry level wage in three years of 12,500 rand ($1,200) a month, or annual hikes of around 30 percent, while the companies have offered increases of up to 9 percent and say they can afford no more.

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http://www.bloomberg.com/

South African platinum producers, which account for almost three quarters of world supply, should consider controlling output to improve prices, said the head of Africa’s biggest fund manager.

Anglo American Platinum Ltd. (AMS), known as Amplats, Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI), the world’s largest producers of the metal, need prices to climb to offset rising costs in an industry already beset by a “concerning” 11-week wage strike, said Elias Masilela, 49, the chief executive officer of the Pretoria-based Public Investment Corp., which manages 1.6 trillion rand ($150 billion) of South African government workers’ pensions.

“They may, as an industry, want to think about supply-demand conditions globally to influence the price,” Masilela, 49, said in an April 1 interview in Johannesburg. “South Africa is a major supplier of platinum, but remains a price-taker. There must be a way of balancing that out given it’s size.”

Masilela’s comments echo those by the governments of South Africa and Russia, which together hold about 80 percent of platinum group metal reserves. The countries plan to set up a production bloc resembling the Organization of Petroleum Exporting Countries, a cartel of the biggest oil-producing countries, they said in March last year.

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Critics warn that the migrant labour system threatens the stability of important gold and platinum producers

Mcingelwa Maqotyna still remembers the humiliation that came with applying for the job: being forced to strip naked in a room full of other men, then stepping on to scales to be weighed.

Once he had landed the job, he travelled hundreds of miles from his village to a mine, where he had to get used to plunging deep beneath the surface of the earth at lightning speeds. Seeing the cage-like lift for the first time, he fearfully wondered if its exposed cables would hold.

For Nicolson Mkananda it was the contrast between the tranquil rural environment in which he had grown up and the hustle and bustle of life at a mine that struck him: the individualism, the strange languages and the strict control and discipline imposed on workers. “It was very, very frightening to go there,” he says.

These men, who left their remote villages near Lusikisiki in South Africa’s Eastern Cape in the 1960s and 70s, were part of a vast pipeline of cheap labour that allowed the country’s gold and platinum sectors to flourish. This system of migrant labour was developed during colonialism and extended under apartheid, becoming a pillar of the economy.

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