The mines sold for 4.5 billion rand despite the plummeting platinum prices. Amplats, as Anglo American Platinum is known, actually values these assets at 7.7 billion rand. This 3.2-billion-rand loss is a sign of just how desperate the company is to dump these mines from its portfolio.
Amplats’ CEO Chris Griffith said the sale was part of a move towards low-cost operations, as it removes these loss-making elements. The plummeting prices have been punishing platinum miners for some time now. The global price has dropped by 40 per cent just since 2011.
Recently South African mining has been hit by China’s economic slowdown too. This has not just affected the buying of platinum, which is needed to produce things like the catalytic converters on cars, but it has also impacted the currency exchange rate.
The National Union of Miners spokesperson, Livhuwani Mammburu, told RFI that the union is welcoming the measure, which is extending the life of the mines that they had thought may be doomed to being shut down.
South Africa produces 70 per cent of the world’s platinum but on top of the falling prices the industry was badly hit by a five-month strike of 70,000 platinum miners last year, with extensive job losses in recent months.
Trade unions have totalled the announcements of upcoming job losses in the industry to a staggering 19,000, which are due to come into force within the next year and a half, adding to South Africa’s unemployment woes.
Sibanye Gold, the company buying these mines, is a South African company and miners are hoping that change might see a different attitude and bring the balance of control in the industry back into the hands of South Africans.
Dumisani Hlophe, however, an economist at the University of Pretoria, says regardless of who is running the mines, the end result will be the same - more layoffs. Hlophe believes South Africans need to adapt to the new global knowledge economy in order to find work in this globalised world.
Yet the country’s unemployment rate actually declined last quarter, coming down to 25 per cent of the population, so the county’s economic forecast may not be so bleak.