Johannesburg - Glencore will shut its Eland platinum mine in South Africa, risking about 1 000 jobs, the Solidarity trade union said.
“We treat every mine closure as a permanent closure and the jobs are lost forever,” Gideon du Plessis, general secretary of the labor organisation, said in a text message.
The company is in the process of reviewing the operation because of “ongoing poor market conditions in the platinum sector and difficult operational conditions at the mine,” Gugulethu Maqetuka, a spokesman for the company, said in an e- mailed statement. It has issued notices about possible job cuts to unions, he said.
Falling commodity prices and rising costs have forced platinum producers including Anglo American and Lonmin to consider job cuts.
Solidarity estimates the mining industry in South Africa, the world’s biggest producer of the precious metal, may lose almost 20 000 positions, the union said in a report Tuesday. One in every four South Africans is unemployed.
Lonmin, the third-biggest miner of the precious metal, said in July that it will reduce annual output by 100 000 ounces over the next two years and eliminate as many as 6 000 jobs.
Platinum has been in a bear market for two years, and South African producers are losing money on three out of every four ounces they mine. Prices have plunged 17 percent this year on a glut of metal from stockpiles and recycled material.
“If a mainstream mining operator cannot make it work, we can’t see that a junior miner can turn it around,” Du Plessis said. “The turning point will come when a sufficient number of platinum mines close down to reduce the oversupply of platinum in the market.”
Glencore distributed its 23.9 percent stake in Lonmin to shareholders in June. It’s current platinum assets comprise Eland and the Molotolo venture with Anglo American Platinum in South Africa. Glencore produced 157 000 ounces of platinum and related metals in 2014, according to its annual report.
BLOOMBERG