[miningmx.com] – Lonmin CEO Ben Magara has made a plea for more decisive action from government to help deal with the current crisis in the platinum industry where he said some 80% of South Africa’s platinum was being produced at a loss.
Addressing a function organised by the African Mining Network in Johannesburg on Thursday evening Magara declined to be drawn on the specifics of what may be unveiled on Monday when it is understood a new agreement is to be signed between government, the unions and the mining industry.
Magara commented that “all the stakeholders need to act in unison and pull in the same direction’ but he placed particular emphasis on government’s role.
He said, ” there are many introspections that have to be made such as – have we (the mining industry) transformed fast enough ourselves. But I believe that government is the mother and one expects mother to understand and to get it right and to enable everybody in the house to do their best.’
The latest government intervention appears primarily aimed at curbing job losses in the mining industry and Magara pointed out that the platinum mines currently employ some 197,000 people.
“With all the linkages through procurements and services and you name it some two million people benefit from the platinum industry. It’s the biggest exporter earner. It earned R90 billion in 2013. It’s an essential industry for the sustainability of South Africa.’
Magara warned of the consequences of South Africa’s slowing economic growth rate commenting, “We are not moving fast enough. We are no longer the real economic player in Africa alone. There are emerging countries that are really firing around us.
“If we do not take our rightful place we will move backwards and they will move ahead. That’s not helpful for us and our people will suffer for it.’
Asked what would be different about Monday’s agreement when a series of previous collaborative pacts and agreements had produced no real changes Magara replied, ” previously we were talking past each other.
“I think now there’s an acknowledgement that we cannot be emotional about the situation that the industry faces today.
“We have to deal with the facts of today’s reality which is that we are not making money. That acknowledgement should lower the temperature and allow people to have rational conversations which, for me, is very useful.
“We are in trouble and we have to help each other. We are no longer in liberation struggle times. Business is no longer the enemy. Business helps with job creation but only profitable businesses can grow and create jobs and only profitable businesses can invest in social and economic investments.’
Magara indicated one of the major thrusts that the platinum industry wanted South Africa to pursue was to push for higher vehicle emission controls in the BRICS countries (Brazil, Russia, India, China and South Africa) because of the boost this would give to platinum demand.
Platinum group metals (pgm) – in particular platinum, palladium and rhodium – are used in the autocatalyst required to clean up vehicles exhaust fumes. Tighter emission standards require greater amounts of pgm to be used in the autocatalyst.
Emission control standards in South Africa, India and China are far lower than in Europe which was the major consumer of platinum for use in autocatalyst.
But Magara said South Africa needed to take the lead and tighten its own emission control standards to set an example it could then promote to its BRICS partners. Such a move would help South Africa’s beneficiation strategy as well.
