South32 expects to start rebuilding at Mozambique project after post-election hit
Earlier this month, the company retracted its output prediction for the Mozal aluminum smelter in Mozambique.
South Africa’s Star newspaper reports the latest casualty of the platinum industry’s woes is the Royal Bafokeng nation.
The Bafokeng people, who control vast parts of the platinum belt in the north west province of South Africa warned on Friday that earnings at its main investment vehicle Royal Bafokeng Platinum could be down by between 52% and 62% over the first six months of 2012:
“The impact of the platinum crisis has already seen Anglo American Platinum, Aquarius Platinum and Eastern Platinum also warning of job cuts. This is likely to be a major strain for Royal Bafokeng Holdings (RBH), which has a very high exposure to platinum mining assets.”
Platinum futures closed at $1,414 an ounce on Friday, down 22% since this time last year as one of the main drivers of demand for the precious metal – catalytic converters used in diesel cars sold in Europe – continues to slump.
Sister metal palladium has fared even worse; at $579 an ounce it is down over 30% for a year ago.
More than 80% of known PGM deposits are found in southern Africa, but apart from falls in the price of PGMs the industry has to deal with falling grades, safety issues as existing mines go deeper and deeper and rising labour and power costs. The spectre of increased government involvement in the sector in both South Africa and Zimbabwe is also adding uncertainty.
The current king, Kgosi Leruo Molotlegi (pictured), has in the past stated that diversifying geographically and beyond the platinum sector is a top priority of his rule, but this has not happened fast enough. Since listing in Johannesburg in November 2010 RBPlat has lost $420 million in market value.
Bafokeng translates as People of the Dew and the tribe who number around 300,000 souls trace their history back to the 1100s.
Kgosi (King) Sekete III, who ruled in the early 18th century, was the first in the line of of the current ruler who is his 15th direct descendant.
