2024-10-30 23:10:00
In South Africa, platinum producers are in a very bad situation. The prices of palladium and rhodium, metals that have been declining with the transition to electric vehicles, have seen their prices collapse after reaching peaks. The bubble bursts and turns against the mining groups producing these precious metals, which employ more than a third of the workers in the mining sector of South Africa, the world’s leading producer of platinum metals.
Over the past two years, falling platinum prices have forced several large mining groups to restructure. South Africa. Well closures, job losses… The Sibanye Stillwater company had to lay off 12,000 of its 80,000 employees. “ Since 2023 we have witnessed a drop in the prices of these raw materials, the main platinoids which are platinum, palladium and rhodium, explains Charl Keyter, the group’s financial director. And I think a lot of that is because of the widely held view that everyone is going to turn to electric vehicles. »
Platinoids victims of the success of the electric car
These platinoids are in fact mainly used in the automotive industry, to make catalytic converters for thermal cars. The pandemic COVID-19then the invasion of Ukraine by Russia, the second largest producer of these metals, had pushed many producers to source supplies from South African mines, causing prices to explode.
« During Covid, we have seen the price of platinum group metals rise to previously unimagined levels. Up to three times higher than the previous all-time highrecalls Peter Major, industry analyst. Now that these prices have come down and returned to more normal levels, the sector is under great pressure, as at the moment there have been large wage increases, large investment projects and very expensive acquisitions. »
Hopes in the hydrogen car
Prices now appear to have stabilized and these mining companies are relieved to see renewed interest in hybrid cars. But they remain hopeful that the ecological transition will work more in favor of hydrogen vehicles, which require platinoids.
« We really think that hydrogen is an interesting energy source and that it will develop in the next decade, judge Craig Miller, CEO of Anglo American Platinum, the world’s largest platinum producer. The role that platinoids can play is first and foremost in the production of hydrogen and, in the long term – not for the moment – in fuel cell cars. »
An optimism that a certain number of analysts do not share, given the slow progress, over the last 30 years, of the technologies that usehydrogen.
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Time.news Interview: Impact of Electric Vehicle Transition on South African Platinum Industry
Editor: Welcome to Time.news. Today, we have the pleasure of speaking with Charl Keyter, the Financial Director of Sibanye Stillwater, one of South Africa’s leading platinum producers. Thank you for joining us, Charl.
Charl Keyter: Thank you for having me. It’s a pleasure to be here.
Editor: Let’s dive right in. The recent downturn in palladium and rhodium prices has certainly made headlines. Can you explain how these shifts are impacting the mining sector in South Africa?
Charl Keyter: Absolutely. As you mentioned, South Africa is the world’s leading producer of platinum group metals. Recently, we’ve seen a significant decrease in the prices of palladium and rhodium, which are crucial for the automotive industry, specifically for catalytic converters in thermal cars. This decline has forced many mining companies, including ours, to restructure operations, leading to unfortunate job losses.
Editor: It sounds like the transition to electric vehicles is a major contributing factor to this decline. Can you elaborate on the connection between the rise of electric vehicles and the demand for these metals?
Charl Keyter: Yes, the surge in electric vehicle production has created a perception that the need for traditional platinum group metals will diminish. Many stakeholders believe that as the world shifts towards EVs, the demand for palladium and rhodium—used primarily in combustion engines—will decline significantly. This has led to a loss of investor confidence and consequently, a sharp drop in prices.
Editor: This sounds like a classic case of innovation disrupting traditional industries. What has been the response from companies within the sector to combat these changes?
Charl Keyter: It certainly is a disruption. Companies like Sibanye Stillwater have had to make hard decisions, including workforce reductions—a painful process for us, given that we had to lay off around 12,000 employees this year alone. We are also focusing on diversifying our portfolio and exploring new mineral resources to adapt to these evolving market conditions.
Editor: Diversification seems like a strategic move. Does this transition mean that the mining sector in South Africa will need to reposition itself entirely?
Charl Keyter: That’s quite possible. While we will continue to mine platinum and related metals, there’s a growing need for us to invest in other minerals that have a bright future. For instance, elements that are used in battery technology may become increasingly important as electrification continues in various sectors.
Editor: Interesting. With job losses and company restructuring, how is the government and local communities responding to these challenges?
Charl Keyter: The situation is concerning, and local communities are feeling the effects of these job losses. We have seen some governmental initiatives aimed at supporting retraining programs and creating alternative job opportunities. However, more comprehensive long-term strategies will be crucial to navigating through this transition while ensuring the livelihoods of those impacted.
Editor: Looking into the future, what do you envision for the South African mining sector in the next few years amid this EV boom?
Charl Keyter: I think the next few years will be pivotal. The mining sector will need to embrace innovation and technology while advocating for the sustainable use of resources. Partnerships with both government and private sectors will be essential to create a more resilient and adaptable framework. Furthermore, we should also highlight the role of platinum in hydrogen fuel cells, which presents an opportunity for the metal in the clean energy transition.
Editor: A hopeful perspective indeed. Thank you for sharing your insights with us today, Charl. It’s clear that while challenges abound, there are also opportunities on the horizon for South African mining.
Charl Keyter: Thank you for having me. It’s an important conversation to have as we navigate these changes together.
Editor: And thank you to our audience for joining us. Until next time, stay informed with Time.news.