Troubles in South Africa's Mining Sector Start to Affect the Economy

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"South Africa's strikes have now affected some 28% of its platinum production, or 17% of global production, according to the Deutsche team. It believes that production losses have the potential to drive up the price of platinum so that it trades at a premium to gold."

With the strikes spreading beyond the natural resources companies, worries over economic paralysis have brought the South African rand to a more than three-year low against the dollar.

Then on Friday, rating agency Standard & Poor's cut the country's credit rating by once notch, following rival Moody's downgrade of the country last month which had marked its first since the end of apartheid.

S&P made it clear that the move was motivated by the strikes affecting the mining companies – and they did not see this as a problem about to go away any time soon, as questions around the ruling party’s plans mount up.

South Africa's strikes have now affected some 28% of its platinum production or 17% of global production, according to the Deutsche team.

They believe that production losses have the potential to drive up the price of platinum so that it trades at a premium to gold. . .View Full Article

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