How are you preparing for potential mine closures amidst the recent profit slumps affecting numerous companies in the PGM space?
We have seen the demand for PGM’s depressed as prices continue to fall spurred by the depreciation of palladium and rhodium, key components utilized in the catalytic converters of gasoline and diesel vehicles. This is all because of an increase in the production and demand of Electric Vehicles and cleaner, greener technologies. In March 2020, platinum dropped to a low of $623 and has not been stable since with pricing today at around $940.
We have already witnessed a steady decline in the sector with investors reluctant to invest heavily in projects that are unlikely to generate significant returns at current price levels. This has resulted in a slowdown in new PGM projects and expansions of existing operations have gone stagnant.
We have also seen lower profitability as companies like Sibanye, Implats, Wesizwe and other’s all reporting losses. We all know that platinum mining is a capital-intensive business, and when prices are this low for extended periods mines struggle to cover operating costs and generate profit.
More regularly we see a new announcement of cost-cutting and downsizing. Anglo-American recently announced that it intends to cut 3500+ jobs and is reviewing 600+ Contractors. Sibanye entered section 189 consultations in October last year to retrench more than 4,000 workers and Implats began a voluntary process last year and Wesizwe cutting about 75% of its workforce.
Without supply adjustments, mines temporarily ceasing operations or a reduction in production until prices are restored, there seems to be little hope for recovery.
We are anticipating an influx of candidates from the PGM sector and believe this could help fill some of the skills gaps currently experienced elsewhere globally in the critical minerals sectors.
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Fleet Mechanic at RAM Enterprise, Inc.
1moI was a Supervisor/ fill in Senior at the CLP plant in Morenci. I helped teach and get that plant up and running again with very positive results. FMI in my experience are very good to work for. I was there almost 9 years