This is very Bullish for Gold imo Thousands of South African Gold Mine Workers Stop Work An estimated 90,000 South African gold miners have joined tens of thousands of labourers in other sectors on a strike seeking better wages, though their union has significantly scaled down the demands. From earlier demands for increases of wages up to 60 percent for some workers, the National Union of Mineworkers (NUM) is now calling for a 10% wage rise. The NUM is the largest union representing about 64% of South Africa's 120,000 gold miners Last week the workers rejected an offer of a 6.5 percent rise - the same as the current annual rate of inflation. The workers went ahead with their strike plans Tuesday despite President Jacob Zuma urged urging both sides to find a solution, saying: "A strike hurts both sides." South Africa's gold industry though one of the biggest in the world, has been in decline in recent years, while the platinum sector is still recovering from violence during last year's strikes. It has been estimated that the gold miners' strike could cost South Africa more than $30m (pounds20million) a day in lost output. - See more at: http://galeforcesales.blogspot.com.au/#sthash.K9Bsh3AB.dpuf
The Platinum sector has not recovered - just fired 7000 workers http://www.enca.com/south-africa/amplats-begin-firing-6900-sa-workers I hear production of Pt year to date is down by more than 0.5 mill oz (about 20%) and rising
Personally, I hope the workers get every benefit and increase they demand...I'm sure the mine owners can afford at least that much.
I agree the workers are not well paid but the problem it is more complex. The mines cannot mechanize production due to government restrictions that force them to employ more basic laborers. The government is trying to fix in-part the mass unemployment problem. When labour is cheep that works, when inflation driven by government printing increases wage pressure this turns bad very fast. The mines cannot afford to increase wages under these conditions with current prices of PM. So the result is everyone will lose, as is always the case. The miners will lose their jobs, the mines will close and more people will be unemployed creating more problems for the country.
They just want annual increases in line with inflation to maintain their standard of which of course is fair, Either way though... It's going to reduce the amount of gold being mined and or increase costs of production increasing the price per ounce on the retail end. Platinum is being effected... Might make a platinum play.. Just worried about Johnson Matthey bringing out a silver catalytic converter.. My mate in Japan is working on it as I write this 1for1
I'm surprised they haven't tried to ship in foreign workers from neighbouring poorer african countries.
They rejected a rise in line with inflation, some recent reports I've read claimed they are currently seeking rises between 60 to 100% That said, they do seem to be paid a pittance when compared with most western countries
Graphene, Cobalt Nickel and Silver all supposedly can be used as cat converters. None of them work outside a lab at this time and costs are prohibitive. As Rick Rule says if Pt doubled in price the impact on a car would be less than $200 - In the overall cost structure it is peanuts. According to Rule we are a decade or more away from an alternate option.
From what i can gather Johnson Matthey have a big R&D spend, i suspect in order to get the big R&D spend they must be close to being able to role it out within a limited timeframe.. Considerations, given the massive scale car companies work on in terms of number of units produced, i suspect less than $200 x 20,000 will start to become a huge cost of production, replacing it with any lesser valued metal would yeild massive savings.
There are a lot of migrant workers in the mines, and in strike. It is not as simple as just giving increases to meet inflation. The whole process is broken, and that will trigger issues in other industries. The unions are significantly more political than in Australia, and if anyone rolls over it has a knock on effect. They need to keep people in jobs. But they are not efficient. With lowering profitability, it just gets worse and worse as they are not able to pay more, but they cant do anything to modernisr the mine. With 40% unemployment you can't have efficiency. Think what you would say if you were a shareholder.
Silver for catalytic converters will be ready for prime time when all new cars have electric motors :lol:
Very true. A few months/years ago there were anti-immigrant riots in South Africa, where the local blacks went on the rampage against immigrant blacks from poorer neighbouring countries, accusing them of stealing jobs. South Africa it has turned from what was a first world, prosperous country, into a basket case. It is on an irreversible economic decline. The problems are similar, high population growth, not enough jobs to cater for this growth, huge crime rate and gross economic mismanagement and corruption by the government.
According to Bloomberg, South Africa's YTD gold production accounts for only 6.07% of global production, with China being the largest producer (13.99%), Australia second largest (9.45%) and United States third (8.35%). Consequently, I think the market can largely disregard supply interruptions from South African mines. A flow-on from labour disputes from the gold miners into the platinum miners, where South Africa supplied around 72% of the world's platinum in 2012, would certainly be bullish for the platinum price, especially as investors look for exposure without mine risk. Another key difference between gold and platinum in times of supply disruption is that there are no large reserve stockpiles of platinum that can come into the market, whereas for gold these reserves do exist, mitigating the usual physical supply and demand dynamics in gold that prevail in other commodities. Among other factors, gold's large above ground reserves contribute to its quasi-currency status. Image/data source: Bloomberg
^^^ I totally agree so why is everyone buying gold and silver and no one is buying Pt? Big mistake !! Also not presented clearly in Pt's case is the 3rd largest producer - Zimbabwe has recently nationalised its mines. So you can delete another 5%. Russian production also falling as mines are exhausted.....
Certainly output is dropping with platinum output decreasing 12% last year. Any significant supply disruption from South Africa is likely to support prices. However, for now the strikes appear to be confined to the gold, car manufacturing and construction sectors. The Financial Times refers to it as "South Africa's traditional strike-season" (http://www.ft.com/intl/cms/s/0/a73d...0144feabdc0.html?siteedition=uk#axzz2dzeoewkb). Also to consider is that there is potential for a seasonal drop in demand for platinum from the Euro auto and heavy vehicle markets (Euro auto catalyst demand accounts for almost 19% of the total global platinum market), which may lead to lower prices. The strong correlation between Europe vehicle sales (AUTMEUV) and the platinum price (XPT) is shown by the chart below. The seasonal drop in Q3 European vehicle sales can be seen at the vertical red lines. Data/images: Bloomberg
Who cares about Europe ?? China is now adopting Cat converters !! Beijing emission controls to benefit catalytic converter makers 22 February 2013 New diesel emission controls introduced in Beijing this month are set to benefit makers of catalytic converters containing platinum group metals. Authorities swiftly imposed new China-5 emissions standard for diesel vehicles on February 1st, with petrol-powered vehicles set to follow on March 1st, reports WardsAuto. The move is likely to speed up the government's drive to improve emissions standards across the country, providing "lucrative opportunities for overseas vehicle-component suppliers", the news provider says. China's new standard is similar to the European Union's Euro 5 introduced in 2009, with the aim of cutting vehicle pollution by 40%. The roll-out, expected across the country over the coming months, will likely produce a boost for companies making catalytic convertor parts, especially diesel particulate filters using platinum group metals. "I think you will see more cars using turbochargers, even with gas engines," comments Steve Man, auto analyst with Nomura Securities in Hong Kong. "Other parts suppliers stand to benefit from upgrades to catalytic converters." He even suggests that China may push for adopting the equivalent of the Euro 6 standard by 2016. Sources: - See more at: http://www.platinum.matthey.com/new...talytic-converter-makers#sthash.rCZGioKd.dpuf
