COST cutting in South Africa’s platinum group metals (PGMs) sector drove a second quarter reduction of 7,000 jobs in the country’s mining sector, said BusinessLive.
Citing data from the Minerals Council, the publication said the job reductions were more than double that of the first three months of the year, and took total employment in the industry to 472,000 at end-June, down 1.5% from the midpoint of last year.
The council’s chief economist Hugo Pienaar warned against proposed electricity cost increases and continued logjams at Transnet which he said would impede the ability of the mining sector to recover speedily.
“Eskom’s application to increase electricity tariffs by more than 36% from April 2025 comes to mind,” Pienaar said of impedients to recovery. “Such an increase will be untenable, both for energy-intensive sectors such as mining and for households,” he was quoted as saying.
“In the bulk commodity space, the slow, albeit welcome, improvement in Transnet’s operational performance suggests that the likes of coal and iron ore mining companies will not be expanding capacity and adding to their workforce soon,” Pienaar said.
PGM prices have fallen under enormous pressure in the last 12 months despite evidence of growing supply deficits. The palladium price has lost about 19% in that period. Platinum, however, is up 10% over the last year.
PGM miners already had high fixed costs so declines in PGM prices had severely affected margins and thus earnings, BusinessLive cited Anchor Capital investment analyst Seleho Tsatsi as saying in its report.
