The WPIC’s newest report highlights the numerous affect of declining platinum group metals (PGMs) costs on the sector, particularly in South Africa, which accounts for about 70% of world output.
The plunge in PGMs costs has been a key driver behind the present challenges within the sector. Platinum, utilized in automotive catalytic converters, jewelry, and numerous industrial purposes, has seen demand volatility as a consequence of shifts in international markets and the transition towards greener applied sciences.
The strain of weak costs on margins has pressured corporations to slash their workforce with a view to stay viable. In line with the WPIC, the sector is now working at ranges final seen earlier than the pandemic, which brought on main disruptions and uncertainty throughout international commodity markets.
Lengthy-term manufacturing issues
Whereas job cuts have offered short-term aid for mining corporations, the WPIC is anxious concerning the long-term penalties. Decreasing the workforce might erode South Africa’s manufacturing capability, resulting in a possible shortfall in international provide over time, it stated.
Manufacturing in South Africa this 12 months is anticipated to fall 2% year-on-year to round 3.9 million ounces.
“The present technique could threat long-term manufacturing erosion,” the Council stated, emphasizing the necessity for a cautious steadiness between cost-cutting and sustaining sustainable output ranges.
The WPIC warns that with out cautious administration, the sector might face a deeper provide disaster sooner or later, which might destabilize not solely South Africa’s mining sector but additionally international platinum markets.
With declines in Russian output, international manufacturing this 12 months is seen falling 2% to five.5 million ounces, a four-year low, the Council stated.