CEO of the Minerals Council South Africa, Roger Baxter, was upbeat following the first day of the Jobs Summit, saying the industry has a proposal to improve platinum demand, a potential growth area.
The sector has been in talks with government to develop a Mandela Platinum Rand in honour of the late statesman’s centenary year in 2018, in the hopes it will become a popular item like the Krugerrand.
Government, business, community and labour agreed on Thursday to do "everything possible" to avoid job losses in the private sector and zero retrenchments in state employment.
Unions had wanted a moratorium on job cuts, which Baxter told Fin24 on the sidelines of the Jobs Summit would have been impossible, given weak commodity prices as a number of gold and platinum companies have already announced restructuring plans expected to cut thousands of positions.
He told Fin24 the mining sector was in a "very difficult space".
"Remember, we have a number of companies, for example in the platinum sector; in the gold sector; that are loss-making… the commitment is to do what we can to try to avoid where we can," Baxter said.
Baxter added that 70% of platinum mines are loss making at current prices, and around 50% of gold mines are not profitable.
Celebrate Madiba’s legacy
The price of platinum is hovering around $825/oz., near its lowest in a decade, according to data by Bloomberg. South Africa produces 70% of the world’s platinum, mainly used in jewelry and catalytic converters for exhaust emissions on higher-end cars.
Baxter noted that the UK, Switzerland, Australia and Canada have platinum bullion coins, and asked why SA hasn’t done the same yet to celebrate the Madiba centenary.
"So watch this space," Baxter said, adding that Minister of Mineral Resources Gwede Mantashe had committed to working with the industry to create demand for platinum.
Mantashe, who spoke at mining conference the Joburg Indaba earlier this week, said that a platinum Mandela coin should be minted, and platinum-catalysed fuel cells used to power off-grid areas, to boost demand for the precious metal.
Speaking in August at the Africa Down Under Conference, Mantashe had said that government and the mining industry were working to trigger demand for platinum groups metals, where SA has a competitive advantage. “One of the key projects under consideration for this is the production of the Mandela Platinum Coin, which will be sold as a reserve asset”.
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