LONDON (Reuters) - Policy uncertainty in South Africa and low commodity prices are hurting investment in the mining sector and will lead to further job cuts, the chief executive of the world’s biggest platinum miner, Anglo American Platinum (Amplats), said on Tuesday.
The embattled industry is waiting for the latest version of the Mining Charter which contains regulations meant to redress imbalances of the nation’s past apartheid rule and stipulates rules for miners to perpetually keep black ownership levels at 26 percent.
“Uncertainty is dreadful for investment,” Chris Griffith told Reuters on the sidelines of Platinum Week in London.
“It puts pressure on jobs and some mines that are already loss-making... there will be further rationalization of the mines and its going to lead to further job losses in South Africa,” he said.
The new rules could mean significantly higher taxes and levies on mining companies operating in South Africa such as Anglo American, Glencore and Lonmin.
In addition to policy uncertainty, South African platinum miners are battling low commodity prices, high costs and social unrest which has triggered thousands of job losses.
Platinum prices inched up last year for the first year in three but are still near eight-year lows despite expectations of a sixth year of supply deficit.
Amplats sold its labour-intensive Rustenburg mines in 2015 to focus on more mechanised mines.
Griffith said 60 percent of the industry was loss-making and that more jobs were at risk. Amplats has cut 15,000 jobs over the last four years.
Smaller rival Lonmin fired about 15 percent of its staff in 2016.
Underscoring the struggles faced by the industry, Lonmin on Monday posted a first-half loss mainly on an impairment charge as the rand currency strengthened against the dollar which raises costs.
In a speech on Monday, South Africa’s mines minister Mosebenzi Zwane told Parliament the mining charter and the Mineral and Petroleum Resources Development Act were “almost complete” after further consultations with stakeholders. Zwane did not give a new deadline.
Additional reporting by Wendell Roelf in Cape Town, editing by Ed Osmond
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