Are the South African Platinum Mine Strikes Nearing an End?

Pyramid of platinum ingots

This year we have seen palladium prices soar as mine strikes and the tensions between Ukraine and Russia have threatened supply. The area in which these mine strikes are occurring – the so-called “platinum belt” – is located in South Africa, the largest producer of platinum in the world. The strike, which began on January 23 of this year (making it 13 weeks long as of today), has been the longest mine strike in South African history.

In the latest development, platinum producers said they would make their latest wage offer directly to employees after previous wage talks crumbled last Thursday. The offer comes from the world’s top three producers of platinum: Anglo American Platinum, Impala Platinum, and Lonmin. The Association of Mineworkers and Construction Union (AMCU) is not happy with the offers made so far.

AMCU’s treasurer Jimmy Gama told City Press “We can’t predict if our members will reject it,” while AMCU member Venter Mulutsi told Reuters “The guys do not want to go back to work, not for this money.”

Despite this sentiment among the striking miners, the platinum producers are betting on the strikers losing their stamina and going back to work after feeling the blow of three straight months without pay.

The above story demonstrates one of the reasons American Bullion does not recommend investments in precious metal ETFs or mining stocks. Large mines are often located in second or third world countries that are unstable politically and economically and therefore more susceptible to price changes. Mining ETFs have also underperformed physical gold in recent years.

American Bullion instead emphasizes the security and stability that comes with owning physical gold or other precious metals in a Platinum IRA or Gold IRA. Precious metals such as platinum or gold are financial assets that do not depend on credit to function. Unlike traditional paper investments, gold and platinum will never go out of business or rely on decisions of a company’s officers.

Safeguard your assets and financial future by calling American Bullion today at 1-800-326-9598 and speaking to a precious metals specialist.