Eskom's Winter Crisis Forecasts Big Decline in South Africa's Platinum Output

Research Report 

By David Davies  - April 2023 

We are pleased to offer the latest research report by Dr. David Davis, which provides a comprehensive analysis of the significant and ongoing decline in power generation and supply in South Africa. This situation has dire consequences for the supply of Platinum in particular on the global stage, further aggravating a significant global supply-demand deficit driven in particular by a growing demand curve for the metal.

According to the report, the estimated loss in South African Platinum mine supply due to the declining power generation by the national utility provider Eskom is approximately 840koz, which could rise to 1,500koz with between 175 and 310 days (per year) of high load-shedding (power cuts) intensity and frequency expected in the future.

This decline in Platinum production in South Africa (which contributes to 73% of global supply) could be around -19% to -34%, resulting in a corresponding projected fall in total global Platinum supply of between -11.5% and -18.5% in 2023.

The extended shutdown of Platinum mines due to power shortages would have a significant impact on global Platinum supply, leading to a Platinum market balance deficit, which would put significant upward pressure on the price of Platinum in the future.

Danger Zone - With the onset of the winter season in South Africa (May through to September) and the anticipation of ever higher stages of power load-shedding, there is a real risk of significant downtime and even closure of most mining operations, including smelters, converters, and refining operations.

This situation could overwhelm even the big producers, leading to the closure of downstream refineries due to the backlog of inventory that will not be processed.

CLICK HERE to download the full report


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