Anglo American Platinum chief executive Chris Griffith yesterday said that outlook for PGMs was positive, following restructuring actions taken by companies and a reprieve in terms of rallying palladium and rhodium in the medium term.
“My message to miners is invest in demand first. We will make lots of money, and supply will catch up later,” Griffith told the PGM’s Industry Day held in Johannesburg yesterday, adding the best lever was to promote jewellery demand.
He said tightening greenhouse gas emission standards, holding platinum as a reserve currency, and finalising the creation of the Mandela platinum coin would contribute to a boost of the PGM industry.
“It is my view that we are today on the cusp of another structural change to the PGM market and if we as primary producers, along with support from the government, don’t invest in demand creation now, then there is a very real risk that we will be facing another crisis in the future, but likewise we could be on the cusp of a longer-term positive trend if we play our cards right,” he said.
Griffith said that the government would collect an additional R2.7billion a year if one million ounces of new annual platinum demand is created and close to an additional 50000 jobs would be created.
However he noted the biggest challenge facing the mining industry was unreliable power supply.
Griffith said the steep increase in power tariffs and carbon tax would have major implications for the mining industry.
“Electricity is one of the contributing factors to significant cost increases, which has ultimately led to the job losses we see across the mining sector more broadly,” he said. “The carbon tax will impact Anglo Platinum by between R200m and R300m a year. We have to ask if this is the right time to introduce a carbon tax?”
The Carbon Tax Bill is expected to be tabled in Parliament for adoption and implemented by June 1.
Griffith said mineworkers had become the highest paid industrial workers alongside Eskom employees.
Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union (Amcu), the biggest union in platinum, said the union was yet to receive a mandate from members.