• 1 hour Russia Approves Profit-Based Oil Tax For 2019
  • 5 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 7 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 9 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 11 hours Aramco In Talks With Chinese Petrochemical Producers
  • 12 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 14 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 20 hours Bidding Action Heats Up In UK’s Continental Shelf
  • 1 day Keystone Pipeline Restart Still Unknown
  • 1 day UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 1 day Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 1 day Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 1 day German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 2 days Oil Prices Rise After API Reports Major Crude Draw
  • 2 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 2 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 2 days Statoil Looks To Lighter Oil To Boost Profitability
  • 2 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 2 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 3 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 3 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 3 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 6 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 6 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 6 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 6 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 7 days Rosneft Announces Completion Of World’s Longest Well
Alt Text

Is Brazil The Next Big Platinum Frontier?

The geology of both the…

Alt Text

The Precious Metal Heading For A Supply Squeeze

Africa’s mining industry has had…

South African Platinum Miners Struggle As Strikes Intensify

Platinum bars

More warning signs emerging this week in the world’s top-producing platinum nation, South Africa. Where it appears the depressed state of industry is endangering the future of several critical mines.

The biggest setback came for major producer Lonmin. Which announced Thursday that its platinum production for the three months to December fell by a full 20%, to 137,000 ounces.

The most surprising thing was the reason Lonmin gave for the production hit.

Mine workers aren’t showing up.

Lonmin’s management said the biggest factor affecting production was absenteeism at its Marakana operations. Particularly affecting the company’s largest production shaft, K3. You have to read the company’s words to believe it:

“The relationship between operational management and unions at this shaft is not working as effectively as we expected, and the yielding of results from the implementation of business improvement initiatives at this shaft is taking longer than we would have liked to see.”

That shows just how strained relations are between workers and miners in South Africa. With those labor problems now directly translating into financial hardship — prompting Lonmin to suggest it will likely cut back on capital projects due to its shrinking cash flows.

And tensions between unions and miners are going to rise over the coming weeks. After major platinum producer Sibanye Gold said it’s planning a major round of layoffs.

Sibanye said Thursday it is looking to cut 330 jobs at platinum operations recently acquired from Anglo American Platinum and Aquarius Platinum. In an effort to streamline overhead costs and improve efficiency. Related: Robots Over Roughnecks: Next Drilling Boom Might Not Add Many Jobs

That makes a lot of sense from a business perspective — with Sibanye already having staff and expertise in-house, eliminating the need for some workers that came along with the purchased mines.

But the move is sure to be unpopular with unions. And given the scale of potential layoffs could even trigger full-out action against the company.

This is going to be one of the first big tests for platinum miners as they try to rightsize operations for the current economic environment. It’s not going to be easy — watch to see if companies like Sibanye can pull off cost saving measures such as layoffs, or if they’ll be stymied by unions and government.

Here’s to keeping it real.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News