fbpx

Is Platinum Holding The South African Economy Ransom?

Is Platinum Holding The South African Economy Ransom?


After a record-breaking 19 weeks of strikes, the problems in South Africa’s platinum industry are impacting growth, trade and the rest of South Africa’s economic performance.

Economist Mike Schüssler and Bruce Whitfield, chief strategist for Investment Solutions, said in a CNBCAfrica video the platinum strikes are exacerbating South Africa’s declining manufacturing, contracting gross domestic product, waning vehicles sales and weakening rand.

Even if the strikes ended today, they said the economy will still be feeling the effects in the third and fourth quarters.

There 55,000 employees not on strike who are affected. For every miner there are 1.6 suppliers who are feeling the effects. They’re not buying things in stores. Property sales are starting to flatten out. This is going to have a very big impact on the economy, Schüssler and Whitfield said.

Miners on strike have lost 36 percent of their income this year. It will take three months to get back to full production.

South Africa faces a downgrade of its credit rating. Is the country headed for a recession? It may be in one already.

“Our trade unions are so far to the left that they’ve probably sold Karl Marx out,” said Schussler.

“We’re reaching the point of maximum pessimism,” Hart said.