South Africa’s platinum miners, reeling from years of curtailed investments, take blow from coronavirus pandemic
- A series of mega open-cast projects in the traditional heartland of South Africa’s platinum belt risk being shelved
- The future of 170,000 people employed by South Africa’s platinum industry is at stake as miners suspend capital expenditure
South Africa’s gold industry has been dying slowly for years. As the coronavirus undercuts the already fragile case for investment, its platinum mines may be next.
Beset by power and water shortages, alongside whipsawing government policies, South African producers have cut spending over the past decade on mines responsible for 75 per cent of global platinum supply. The virus is accelerating that trend, damping demand for the catalytic converters that are the largest users of the metal, while stimulus packages push carmakers to speed a shift to electric vehicles.
A series of mega open-cast projects risk being shelved – depriving a recession-hit economy of essential investment – but the toughest blow may land on the so-called western limb, the traditional heartland of the nation’s platinum belt.
“The western limb region has been the bedrock of South African platinum and that is in decline,” said Mandi Dungwa, an analyst at Kagiso Asset Management. “It is the end of an investment cycle in those type of mines.”
Shunning capital spending leaves one of South Africa’s biggest export industries in limbo, just as the demise of the nation’s gold mines enters its final phase. With about 170,000 people employed in platinum mining, the timing is bad for President Cyril Ramaphosa as he battles the biggest economic contraction since World War II.