S Africa Platinum Sector Participants Meet To Consider Way Around Layoffs
08/01/2012| 10:42am US/Eastern
JOHANNESBURG--Platinum sector participants in South Africa met Wednesday and promised to look for ways around laying off workers amid weakening demand and lower prices for the metal, which have been hit particularly hard by economic problems in Europe.
Amid the dire outlook, a task team comprised of government officials, union representatives and mining companies have been holding meetings to work together, the department of mineral resources said Wednesday.
Platinum mining companies have been posting drops in profit this month and cuts to spending. The largest platinum producer, Anglo American Platinum Ltd. (AMS.JO), told unions this month that it wants to lay off 727 workers at mines in the country. The company is carrying out a review of operations which could include mine closures or sales of some assets.
"The Platinum Task Team have agreed that all measures to support the industry will be explored before retrenchments," the department said in a release.
Mining companies in South Africa, which produce around 80% of the world's supply of platinum (used largely in catalysts to clean exhaust from cars as well as jewelry), are faced with cutting costs to prevent losses on their books amid a drop in sales and higher operating costs.
Producers of the metal and industry specialists forecast platinum will be in a roughly 400,000 ounce surplus this year, with Europe's car industry, the primary user of the catalysts, hit by the debt crisis, a situation not helped by an increased in the amount of recycled metal hitting the market.
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