South Africa mine strike could hurt ailing platinum market
Share Now on:
Police in South Africa have shot and killed 34 workers at a platinum mine. It’s a reminder that our precious metals come from some pretty unstable places. A dispute between two feuding unions at the mine turned against police, who opened fire. In itself, the event is not a huge shock to global supply. But platinum prices are rising.
Peter Major is a mining consultant with Cadiz Corporate Solutions. He’s in Cape Town, South Africa, and says platinum consumers in the West and elsewhere in the world will feel the effects of this, but only barely so, because prices have been so low for so long. “Platinum is a very reusable commodity, so auto catalysts are being recycled. Jewelry is a very large component, maybe 35 percent, but people stop buying platinum jewelry when it gets up to $1,800 to $2,000 an ounce,” says Major. “And basically the growth in platinum off-take hasn’t kept up with the supply.”
Major says he does unfortunately expect more violence. “There’s an underlying current here, because the miners are used to double-digit wage increases for the last 10 years, and the mines could pay that because they were getting 15 and 20 percent increases in the platinum price for the last 10 years. But now, the last few years, with the platinum price going flat, the mines can’t continue paying 10, 11, 12, 13 percent wage increases. So that’s not going to sit well with the rest of the labor force.”
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.