South Africa’s leading platinum group metals (PGMs) miners have reported significant losses throughout 2023, following a sharp decline in mineral prices and escalating costs. According to Oilprice.com, the downturn has severely impacted the profitability of major companies in the sector.
Impala Platinum Holdings Ltd (Implats) experienced a dramatic profit drop of over 85% in the latter half of 2023, further exacerbated by asset write-downs in both South Africa and Canada. Similarly, Anglo American Platinum Ltd (Amplats) reported a 79% decline in profits for 2023, marking the lowest earnings level in thirty years.
This financial turmoil has had a direct impact on the stock market, with shares of four of South Africa’s largest PGM mines declining on February 8. The domestic PGM sector, which satisfies 70% of the global demand, faces the prospect of significant job cuts as stated by its Minerals Council, attributing the cuts to rising operational costs and diminished demand, particularly from China.
Sibanye Stillwater, the largest employer in South Africa’s mining sector, announced the potential closure of four unprofitable PGM shafts, putting approximately 4,000 jobs at risk. The industry’s future now hinges on the combined efforts of businesses and the government to navigate these challenges effectively. Despite the expected reduction in direct workforce, there is a concerted effort to ensure the sector’s survival and growth.