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Platinum's plunge reflects Marikana's pain


It's the fifth anniversary of the shooting at Marikana in South Africa where police opened fire on a large group of armed striking miners – killing 34 in what was reminiscent of heavy-handed Apartheid-era state action.

Amnesty International has urged South African authorities to take action against those involved in the shootings and murders the previous week, which saw ten workers and security guards stabbed to death.

The period, August 2012, had seen a new mining union Association of Mineworkers and Construction Union (Amcu) threatening the ANC-aligned National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (Numsa).

The link with the ruling ANC is important as one of its high-ranking officials is a shareholder of Lonmin's Marikana Platinum operation. Cyril Ramaphosa has faced a political backlash over his role in the shooting where he sent a letter to the South African Police Service in the days before the shooting.

Amnesty says those who are suspected of criminal responsibility in relation to killings have yet to be brought to court.

“The tragedy of the Marikana killings is compounded by the shocking fact that no one responsible for the bloodshed has yet been held accountable,” said Shenilla Mohamed, executive director of Amnesty International South Africa.

“If the South African government wants to demonstrate that it is committed to truth and human rights, it needs to ensure that the wheels of justice start turning far faster than they have done over the past five years.”

In June 2015 the Farlam Commission of Inquiry was set up by the South African government to probe the killings with a view to understanding the criminal liability of members of the SAPS who were involved in the events at Marikana.

In December 2016, President Jacob Zuma announced that criminal charges would be brought against senior police officers involved in the killings.

The violence of the day, which also left 70 people injured, continues to haunt both the miner and the country. The mine itself at Marikana has dealt with a platinum price that peaked at $1,733 an ounce in September 2013, but has slipped to its present level of $976 an ounce.

The price of platinum has dropped over the last five years, mirroring the sector's problems in South Africa

Platinum mine production grew exponentially after the Second World War with the petroleum industry, in particular, discovering that catalysts could be introduced to increase the octane rating of petrol. In 1974 the US car industry began using the autocatalyst, which is technology that converts dangerous gases in vehicle exhaust systems into harmless substances. The interest in the metal grew as it also featured as an important platinum group metals' (PGM's) mineral in the early plastics industry.

With an early start as a valued mineral in Japanese jewellery, it eventually emerged throughout the world in the 1980s as a valuable commodity. This spread quickly through the world as bars and coins were minted to meet the demand for a physical investment to compete with gold. The metal also saw a spurt of interest in the 1990s with medical and defence applications growing.

South Africa, Russia, Canada and Zimbabwe are the main sources for platinum with the Rustenberg belt northwest of Johannesburg by far the biggest source. By 2011 the Merensky Reef formed 2-billion years ago accounted for 63% of ore processed in the country, and it's along this reef of high ore-bearing rock that the Marikana Mine can be found. South Africa possesses more than 80% of the world’s PGM reserves. Along with Russia, platinum mining in South Africa produces a total of 90% of the world’s platinum demand or around 130 tons per year.

Marikana Mine. The scene of the massacre is above, centre left, where a small rocky outcrop can be seen – 34 workers were shot dead between the hill and the informal settlement in the middle.

The Merensky Reef is narrow and low – less than a metre thick. That makes it extremely difficult to work and platinum miners are some of the hardiest amongst the tough mineworkers in South Africa. Miners use hand-held drills to bore holes, then blasting takes place. Ore is moved by scrapers attached to winches hauled to the surface. Many miners, including Lonmin, mint their own platinum on site, close to the Rowland Shaft (in the image above). Minerworkers find the mining process difficult and dangerous.

Most are migrant workers, many from the Transkei region of South Africa. It was this group which was particularly hard-hit by the shooting with villages in the Tsitsikamma area all experiencing loss through the shooting. Amcu had found a ready-made workforce receptive to its message in 2012, where the union had targeted platinum and gold mines for expansion. That did not sit well with NUM and Numsa and tension rose with NUM, for example, accused by workers of being part of management. The NUM had offices at Lonmin's main mine office which led to the perception that they were not doing enough for workers.

While Marikana's cause is debated and the South African government remains under fire by NGOs like Amnesty International, the price of platinum has languished in 2017. In dollar terms it rose only 4% this year while other metals, like gold and palladium, rose substantially. In 2015, Lonmin was about to launch a rights issue at a 94% discount, but at the last minute the Public Investment Corporation increased its stake to protect the value of the miner.

One of the possible solutions to Lonmin mines in South Africa is to shutter operations but the political fallout would be egregious according to analysts. One of the possible future plans for the metal has been touted by the World Platinum Investment Council, which is meeting central banks in attempt to get them to adopt platinum as a reserve currency. This would be a stimulus but in an era of Bitcoins and digital currencies, the future for platinum and the Marikana operation is not clear.


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