ngoshwe
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- Mar 31, 2009
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Dineo Faku
The platinum market was expected to move into a deficit from a surplus last year, while supplies of the metal were to drop by 12 percent to an 11-year low as losses associated with strikes disrupted output this year, London-based research company Johnson Matthey said yesterday.
In its review for 2012, released yesterday, Johnson Matthey reported that supplies would fall to 4.25 million ounces in South Africa this year because of strikes and the decision by junior companies to suspend operations at unprofitable mines.
The Johnson Matthey research forecasts that the platinum market will move into a 400 000 ounces deficit this year from a 430 000 ounces surplus last year.
At this point , the outlook of the South Africa supplies in 2013 is extremely uncertain but it is difficult to expect an increase in South African output of any great magnitude from the 4.25 million ounces we are forecasting for the year, Johnson Matthey principal analyst Alison Cowley said.
The report has been described as a confirmation of the negative effect of the strikes over wages, which culminated in the police killing 34 protesters at Lonmins Marikana mine on August 16.
Impala Platinum spokesman Bob Gilmour said yesterday that the company agreed with Johnson Mattheys view that both the platinum and palladium markets would move into deficit this year.
We believe this situation could be maintained over the medium term due to a combination of increasing demand and constrained South African supply, he said.
This in turn would restore prices to levels required for further capital investment, which would be positive for the sector, Gilmour added.
South Africa lost 300 000 ounces of platinum production in the first three quarters of the year because of strikes and safety stoppages.
Finance Minister Pravin Gordhan reported that an estimated R10.1 billion was lost to strikes and stoppages in the platinum and gold sectors since the beginning of the year in his medium-term budget policy statement last month.
Severe disruption to platinum group metals is expected to reduce sales from South Africa and result in a 10 percent decline in the worldwide supply of platinum to 5.84 million ounces.
Already, Anglo American Platinum (Angloplat), which supplies 40 percent of the worlds platinum supplies, is losing 3 000 production ounces of the metal a day as operations ground to a halt amid a strike over higher salaries.
In a bid to end the eight-week strike, Angloplat gave employees an ultimatum to report to work today or face dismissal.
Imara SP Reid analyst Percy Takunda said the deficit would widen if Angloplat employees did not return to work, while the problem should be resolved if they did return to work and production ramped up.
You are going to see companies with operations under way making money as the platinum price reacts positively, he said.
The platinum price had strengthened to $1 595 an ounce before sliding to fix at $1 585 in London yesterday afternoon.
The report indicated good news for the jewellery industry, citing that almost all of the platinum purchased in the first three quarters went into manufacturing platinum jewellery pieces to meet growing wholesale and retail demand.
The report forecast a 14 percent increase in jewellery demand to 1.92 million ounces.
Platinum is used in the production of jewellery, as well as in catalytic convertors to reduce emissions in vehicles.
Palladium, which is used in autocatalysts, will be in a worse supply position than platinum as it was expected that it would switch to a 915 000 ounce deficit this year from a 1.26 million ounce surplus last year, the report indicated.
[h=1]South Africa: Cosatu Intimidation of De Doorns Workers Despicable[/h]RESS RELEASE
I visited some of the De Doorns farms yesterday and was shocked to witness a full-blown intimidation campaign being waged by Cosatu against farm workers who are reluctant to strike.
Cosatu organisers were standing on street corners and telling workers that their houses would be burnt or their wives raped if they went to work. This followed the torching of a farm worker's house on Tuesday night. When I asked the police what they are doing to support workers to return to work, their answer was "they must phone us and we will assist them to get out of the area".
It is clear that these 'strikes' and intimidation are politically motivated. They are the latest installment in the ANC's 'Project Reclaim' which aims to make the Western Cape ungovernable. It is no co-incidence that Marius Fransman has emerged as a central figure in the De Doorns unrest.
The Food and Allied Workers Union (Fawu), a Cosatu affiliate, yesterday announced a campaign of 'rolling mass action' in support of the strikes. This is despite Tony Ehrenreich's claim that the strikes were 'self-organised'.
The ANC and Cosatu's 'rolling mass action' in the Western Cape makes no sense because the national minimum wage is not set by the provincial government. It is set by the national Minister of Labour, the ANC's Mildred Oliphant - in consultation with Cosatu itself.
The reality is that this 'mass action' is a Cosatu-ANC orchestrated campaign to intimidate workers and destabilise rural communities in the Western Cape.
The DA fully supports an investigation into working conditions on farms across the country. Farm workers directly support close to one million of the five million people living in the Western Cape alone. We must do all we can to expand farm workers' opportunities and improve their quality of life.
It is despicable that Cosatu and the ANC continue to use farm workers as pawns in their political strategy to win power in the Western Cape. The DA will continue to support the rights and livelihoods of everybody in our rural communities so that all may benefit.
[h=1]South Africa's Striking Miners Have Until Wednesday to Accept Amplats Offer[/h]Amplats, a division of London-based Anglo American PLC (PINK:AAUKY) that is offering a one-time payment of about 4,500 South African rand, or $512, to get back on the clock, hopes the national labor federation representing the workers, known as COSATU, will be able to urge the workers to accept the deal and back off their demand for a monthly wage increase of the same amount of cash offered as a one-time payment.
"COSATU was approached by the strike committee to engage with them to facilitate a return to work of the employees who are currently on the illegal strike," Amplats spokeswoman Mpumi Sithole told Reuters.
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The countrys mining sector problems are also the worlds. According to a report Tuesday by specialty chemicals company Johnson Matthey, the worldwide supply of platinum will be down 10 percent this year. South African mining strikes and safety stoppages in the first nine months of the year have resulted in a loss of 300,000 ounces. Meanwhile, a global deficit of 400,000 ounces is predicted for the year, due to a firm demand of 8.07 million.
Amplats is considering shutting down some South Africa operations. The company, whose parent has a market cap of more than $40 billion and paid two dividends to shareholders in March, said it cannot afford to raise the workers salaries by $512 a month, which it claims would add $296 million a year to its annual South African payroll. The strike has cost the company $250 million in lost productivity.
The countrys mining sector has been grappling with labor unrest for much of this year. At least 50 people have been killed since August, mostly a result of police actions against work stoppages and protests that have been deemed illegal because they have not been authorized by union organizers. Some of the deaths have been linked to union militants, too.
On Tuesday local police said they discovered the latest casualty: a dead 56-year-old mine worker from Mozambique found lying in a soccer pitch near an Amplats laborers housing facility. The man appeared to have been stoned to death.
"It is alleged that he was part of a group of workers who were returning from duty when they were assaulted by striking mine workers," police spokesman Ronell Otto said, according to AFP.
The strikes have also affected gold mining operations in the country, but those actions have been resolvedat a cost. Last week, Johannesburg-based AngloGold Ashanti Limited (NYSE: AU), the worlds third-largest gold producer, announced last week in its disappointing quarterly report that it will lower its dividend to shareholders due to South African strikes that cost it $400 million.
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