Mined platinum supply fell to its lowest level in 12 years during 2012, pushing the market into a small deficit, largely because of strikes in South Africa, the world’s largest source of the metal.
A leading authority on the platinum market, London-based Johnson Matthey, said platinum shipments from South Africa fell by 16% to 4.1-million ounces, a drop of 750 000oz.
This left the global market in a deficit of 375 000oz, with primary or mined platinum supply at its lowest level in 12 years at 5.64-million ounces, Johnson Matthey said in its 2013 platinum survey released yesterday.
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"South African supply of platinum fell to its lowest since 2001 last year as a result of strikes, safety stoppages and mine closures, but there are no definite prospects of significant recovery in output in 2013," it said.
"Some of the smaller platinum mining operations were closed last year; in 2013 a substantial amount of capacity is due to be shut down," it said.
The bulk of South Africa’s large platinum miners were brought to a standstill by unprotected and violent strikes in which about 50 people were killed last year.
South African platinum producers are coming under tremendous pressure from a variety of issues, with two-thirds of platinum mines operating at a loss and forcing companies to cut jobs and output of platinum group metals.
Strikes reduced production by 600 000oz last year, "compounding the pressure being felt by South African mining companies from above-inflation labour and energy cost increases, falling productivity and torpid dollar platinum group metal prices," Johnson Matthey said. The platinum price averaged $1552 last year, $169/oz lower than in 2011.
Safety stoppages cost 70 000oz.
"These adverse factors began to make themselves felt in the form of mine closures, with three of the smaller mines in South Africa and one tailings reprocessing plant ceasing to operate, in all taking around a further 60 000oz out of play in 2012," Johnson Matthey said.
Article continues on page two: "The industry is in a lot of trouble..."