Platinum miners to cut up to 7,000 jobs in South Africa 

Mine workers

Platinum miners are increasingly looking to restructure their unprofitable shafts in South Africa following a decline in commodity prices, potentially impacting between 4,000 and 7,000 jobs. 

This is feedback from the Minerals Council of South Africa in a statement released as part of the Mining Indaba this week. 

The latest data from the council shows that the mining sector’s contribution to GDP crashed 12% in 2023 due to the electricity and logistics crises that have hit miners hard.

In particular, platinum group metals (PGM) miners have been hard hit with steadily declining commodity prices. 

Platinum mining shafts in South Africa are among the world’s deepest, oldest and most expensive to run, exacerbating the impact of declining PGM prices. 

These miners have also been hit by high labour costs, which, when combined with electricity, make up most of their costs.

This has led many to discuss the need to restructure their unprofitable operations in South Africa. 

Some miners have already begun restructuring their operations, potentially impacting between 4,000 and 7,000 jobs in South Africa. 

Demand for PGMs is expected to rise as interest rates are cut worldwide and global growth picks up. 

However, there is long-term uncertainty about the future of PGM demand due to the transition from internal combustion engines to electric vehicles. 

In particular, demand for platinum, palladium, and rhodium will decline as their primary use is in the automotive industry. 

Impala Platinum (Implats) and Sibanye-Stillwater were among the first to begin their job cuts last year. 

Implats spokesperson Johan Theron told Reuters that the miner had begun the process at its head office in October and expanded the offerings of exit packages to its Rustenburg mining complex in November. 

It is unclear how many jobs Implats plans to cut. 

Theron said the company’s Rustenburg mines are scraping by for now and did not rule out further action if prices remain low. 

“The shafts are not making money, but they are not losing money either. They are just getting by,” Theron said

The miner is also considering postponing investment in its projects in Zimbabwe and expansion projects at its South African mines. 

Sibanye announced it would enter into Section 189 consultations to retrench over 4,000 workers amid the company’s restructuring towards the end of last year. 

CEO Neal Froneman said job cuts in platinum mining are unavoidable as prices continue to fall, requiring “significant restructuring” of the sector. 

“We certainly can’t run unprofitable shafts, and our cost structure is probably the lowest in the industry. So if we have loss-making shafts, of which we have a few, they will have to be closed, and I say this with all the sensitivities on potential job losses,” said Froneman. 

Sibanye said that above-inflation increases in key cost components such as electricity, water, wages, and fuel, combined with the recent decline in PGM prices, have significantly impacted the global PGM industry’s profitability.

Some of South Africa’s diversified miners, such as Anglo American and Glencore, have also begun to cut jobs. 

Anglo American has begun cutting jobs at its head office in South Africa, while Glencore has begun retrenchment processes at its iMpunzi coal-mining complex.