Problems at platinum mines highlight importance of recovery of precious metals from waste – By Dr Tim Johnson

In August of this year the world watched with a mixture of horror, disbelief and confusion as violent protests unfolded at the Lonmin platinum mine in Marikana, South Africa.  For a detailed account of these events you would be well advised to spend a few minutes searching the web, but to recap briefly an initial strike by rock drillers on 10 August resulted in violent clashes on 13 August that left nine people dead, including two police officers.  On 16 August, subsequent protests spiralled out of control and police opened fire on the demonstrators, leaving 34 more workers dead and injuring at least 78 other workers and police.  Further violent clashes continued in the following days and weeks with the effects spilling over in other mines in the area, but thankfully without repeating the previous loss of life.  The financial costs of this six-week strike have been estimated by President Zuma to be around US$548m and this has not been the end of the industrial unrest in South Africa.  The heart of the dispute was a demand by workers for a tripling in wages from around US$500 per month to around US$1500 per month and although a revised offer of up to a 22% increase in wages that has been accepted by the miners seems to have brought the immediate crisis to an end, these events serve as an untimely reminder of the many dangers and issues associated with mining the metals we all need for our modern society.  It is for good reason that platinum is consistently included in lists of scarce and strategic materials. 

There are many things one could debate about these desperately sad developments and no doubt this whole series of connected events will be investigated in due course by the relevant local authorities.  In any case it is impossible to unpick the causes or propose solutions from this distance and I don’t intend to try.

What can be said with more confidence is that until this dispute erupted into violence the general trend in most precious metals prices was for a gradual decline after reaching a peak in early 2011.  The expectation since then has been that the slowdown in manufacturing arising from the recession in many western countries will lead to a decrease in demand for these metals, especially for consumer goods such as cars and electronic products, and that this will lead to a drop in the market prices of these metals.  However, as the dispute deepened and spread to other mines, so the possibility of significant reductions in the supply of all precious metals changed this equation and the price of platinum rose by around 20%, dragging the prices of gold, silver and other precious metals with it.  It is entirely possible, indeed highly likely, that resolution of the labour dispute at the heart of the incidents in South Africa will reverse this trend somewhat.  However, continuing strikes at mines owned by AngloGold Ashanti, Gold Fields and Anglo American Platinum and the threats of consequent mine closures still cast a shadow over the precious metals industry in South Africa and this all illustrates the delicate balance between the forces of supply and demand in the precious metals market.

Platinum producers are in a difficult position if their mine production is interrupted because they sign contracts with their customers to supply certain guaranteed amounts of metal over agreed periods of time.  If circumstances mean they are unable to satisfy these requirements from the on-going output of the mine, they have to fulfil the terms of these contracts by drawing on their existing stocks of metal or perhaps even by purchasing metal from alternative sources, which is very undesirable.  This prospect of this and an understandable “don’t put all your eggs in one basket” mind-set is becoming a more and more common topic of conversation in the discussions we have with potential customers for our platinum group metal recovery systems.  Tetronics’ technology is aimed primarily at recovering metals from waste materials and as such provides platinum producers and waste processors alike with an important alternative source of metal to the traditional mining routes.  Indeed, already around 20% of the global supply of platinum comes from these recycled sources and the demand for platinum now cannot be met without recycling.  The amount of recycled supply continues to increase as companies try to spread their risks, whilst improving the environmental profile of precious metal production and with one Tetronics plasma plant commissioned in Taiwan this year already and two further plants for China and Japan in construction it is little wonder that this remains a very active area for all of us here at Tetronics.

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