Platinum mergers could provide relief, but are no final cure
But small miners may help with redistribution
Twenty years ago, South Africa's platinum sector was dominated by three major players: Anglo American Platinum, Impala Platinum and Lonmin. Today, 16 or so companies operate in this environment. Consolidation could be a solution for the stagnant sector, analysts say, although growth in small miners may be good for competitiveness and sharing the country's wealth. An executive at one of the platinum houses, who wished to remain anonymous, said consolidation was needed because there were opportunities for synergies that would help in saving costs and running a more efficient platinum sector. For shareholders "it makes no sense to have 16 miners, although it benefits customers". Analysts in the main agree with calls for consolidation in an industry that has suffered from a lack of investment over the past decade and from two major labour strikes. Hurbey Geldenhuys, analyst at Vunani Securities, said consolidation could offer some short- to mid-term solutions to avoid shutting operation...
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