The platinum industry has been dealt another blow with the announcement yesterday by the Johannesburg Stock Exchange-listed Sibanye that it will be entering into a consultation process at its platinum operations, which could result in the retrenchment of approximately 330 employees.
The mining sector in South Africa – particularly the platinum sector – has been in turmoil over the past two years, with Statistics South Africa (StatsSA) reporting recently that the combined worth of South Africa's 35 top platinum mining companies has dropped by 55% since June 2014. Last year mining production fell by 2.9% – largely due to a 12% drop in platinum metals production.
The three major platinum mining companies in South Africa - Anglo American, Lonmin plc and Impala Platinum - have all had to consider closures or retrenchments due to strikes, low demand and dwindling profitability.
"At current prices, 70% of the platinum shafts in South Africa are losing money across the industry by our calculations," said Impala spokesman Johan Theron.
James Wellsted, senior VP investor relations for Sibanye, said in a statement that a final decision on the way forward would be taken following consultation with organised labour representatives and relevant employees.
He pointed out that in 2016 Sibanye had incurred approximately R800 million in operational costs which need to be obtained from its Kroondal and Rustenburg operations to ensure sustainability.
