South African platinum industry could shed up to 7,000 jobs to cut costs

South African PGM miners, home to around 70% of global mined platinum output, are discussing the need to restructure unprofitable production, the council said at the start of the Investing in African Mining Indaba conference in Cape Town.

The Minerals Council said the sector, largely dependent on automakers’ use of PGMs to curb exhaust emissions from engines, faces “a great deal of uncertainty” as the world pivots towards electric vehicles.

Top global PGM producer South Africa has some of the world’s oldest and deepest platinum mines, which are expensive to operate, especially when metal prices are low.

The prices of palladium and platinum fell by 40% and 15% last year, respectively, mainly because of weak demand in China.

Electricity and labour costs account for most of PGM miners’ total costs, the Minerals Council said in a statement.

“In light of this, various prominent PGM miners are restructuring their operations potentially impacting between 4,000 to 7,000 jobs,” it added.

Anglo American’s CEO Duncan Wanblad told delegates at the Indaba that margins for mining companies facing declining ore grades and sharply increased input costs “evaporate quickly”.

“What matters is the industry’s and government’s ability to navigate these challenges to ensure that the industry does survive and prosper – yes with smaller direct workforces, and this is a reality that the industry is contending with right now,” he said in a speech at the Cape Town conference.

Anglo’s South African PGM unit Anglo American Platinum (Amplats), which employs over 20,000 workers in South Africa, is reviewing costs.

Anglo American as a whole aims to cut capital expenditure by $1.8 billion by 2026, after reporting lower profits and returns for the first half of the financial year.

Sibanye Stillwater, South Africa’s biggest mining sector employer, has also said its planned restructuring could lead to the closure of four loss-making PGM shafts and the loss of 4,095 jobs.

Impala Platinum said it was offering voluntary job cuts to workers at its South African operations.