South Africa Platinum Output Falls Record 49% Due to StrikeAndre Janse van Vuuren
South African output of platinum-group metals sank the most on record in May after a strike halted production at the world’s three biggest producers.
Production of the metals plunged 49 percent from a year earlier as total mining output fell 6.5 percent, the Pretoria-based statistics office said in a report on its website. Manufacturing, which was partly affected by the mine stoppage, contracted the most in eight months in May, dropping 3.7 percent, according to a separate report.
A five-month strike by more than 70,000 miners at Anglo American Platinum Ltd., Impala Platinum Holdings Ltd and Lonmin Plc cost the companies 23.9 billion rand ($2.2 billion) in revenue and workers 10.6 billion rand in wages by the time it ended on June 24. The stoppage pushed South Africa’s economy into contraction in the first three months of this year as production plunged in the country that accounts for more than two-thirds of global mined supply of the metal.
“The disruptions in the platinum sector clearly had a massively negative impact on manufacturing,” Kevin Lings, an economist at Stanlib Asset Management Ltd. in Johannesburg, said in an e-mailed note to clients. A strike over pay by more than 220,000 metalworkers that began on July 1 threatens to cut production further, he said.
The decline in platinum output was the biggest since the statistics agency started keeping records in July 1994.
The rand fell 0.5 percent against the dollar to 10.7212 as of 4 p.m. in Johannesburg, taking its drop this year to 2.1 percent.