Glencore Looking to Close SA Platinum Mine Due to Low Platinum Prices

In the latest hit to the South African platinum sector, Glencore (LSE:GLEN) may close down its Eland platinum mine in the country.
According to Bloomberg, the miner is considering closing the mine due to falling platinum-group metals (PGM) prices, and has issued notices to relevant unions. Leaders of the Solidarity trade union are taking the potential job losses very seriously, telling the news outlet that the closure would impact roughly 1,000 jobs.
“We treat every mine closure as a permanent closure and the jobs are lost forever,” Gideon du Plessis, general secretary of the Solidarity union, told Bloomberg. “If a mainstream mining operator cannot make it work, we can’t see that a junior miner can turn it around.”
To be sure, platinum prices haven’t been faring so well this year. Spot platinum prices have lost $200, or 17 percent, so far in 2015, reaching $992 per ounce. The metal briefly rose above $1,500 per ounce last July, but has dropped 34 percent — over $500 — since then.
Its sister metal, palladium, has dropped 26 percent so far in 2015 to hit $597 per ounce.
PGM companies have certainly been feeling some pain. The share prices of Anglo American Platinum (LSE:AAL), Impala Platinum (JSE:IMP) and Lonmin (LSE:LMI) reached multi-year lows in July, with Reuters reporting that Lonmin’s touched its lowest price since 1983.
Analysts have said that the platinum price issue could lie with oversupply; even though platinum is in deficit, that deficit is shrinking as platinum miners continue to ramp up production. While some companies, such as Lonmin, have plans to put some of their higher-cost operations on hold, others, such as Anglo American, have said that major platinum supply cuts are unlikely.
In any case, investors will be keeping an eye out for more news from Glencore regarding the closure of Eland. The diversified miner has already gotten rid of some of its other assets this year, selling its stake in three base metals mines for $290 million just last week amidst poor copper and nickel prices.

Company news

Stillwater Mining (NYSE:SWC) is also moving to conserve cash in light of lower PGM prices. The miner provided an update this week on its previously announced reorganization plans, adding that it will reduce its workforce by 119 employees. The company is also implementing its last and best offer for unionized workers after failing to reach an agreement regarding a new contract in earlier labor negotiations.
Meanwhile, Wallbridge Mining (TSX:WM) reported its half-year results last Thursday, noting that it recorded revenues of $12.9 million (nil for net earnings) and that it expects to maintain steady cash flow from its Broken Hammer operations, even with the current low price environment.
Finally, North American Palladium (TSX:PDL) CEO and CFO Phil du Toit and David Langille resigned from their positions at the company last week. The board has appointed Jim Gallagher, COO, as president and CEO, and Christine Napierala as CFO.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.