El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
Platinum futures trading on the Nymex market in New York gained nearly $20 an ounce or 1.8% to $1,080.90 on Tuesday while palladium contracts added $11.35 an ounce or 1.7%, to $684.90 an ounce. Year to date platinum is up 24.5% and palladium’s price has risen by more than 22%.
The advance in the price of the most widely used platinum group metals came after South Africa’s top labour union for mineworkers in the industry said no deal was reached after more than a month of talks.
Reuters reports The Association of Mineworkers and Construction Union (AMCU) has declared a dispute on wage negotiations with the top three global producers Anglo American Platinum, Impala Platinum and Lonmin which together account for 60% of global platinum output:
“AMCU is demanding pay hikes of more than 50 percent for its lowest pad members, who take home around 8,000 rand ($557) a month, and a 15 percent hike for its higher paid members.”
If talks fail and a government appointed mediator fails to break the deadlock, workers could down tools within 48 hours of a strike being called. AMCU led a bruising 20-week strike in the first half of 2014 that lit a fire under PGM prices, but with production in South Africa returning to pre-strike levels platinum and palladium prices gave up most of those gains in 2015.
At South Africa’s ultra-deep platinum mines, worker pay make up almost half of mining companies’ operating costs and output is also frequently affected by stoppages over safety.
Platinum and palladium prices tends to be volatile thanks to the highly concentrated supply environment. Together Russia and South Africa control between some 80% of the world’s supply of PGMs (South Africa on its own produces 80% of the world’s rhodium). The structure of supply has not altered in any substantial way since the 1970s when platinum and later palladium came to the fore as an important part of the world’s automobile industry.
Creative Commons image by Rene Beignet
Comments
SnakePlissken
$557/month x 12 months = $6,684/month. Sure, we can compete with that.