South Africa’s mining industry, unions and the government signed a broad plan on Monday to stem a wave of job losses triggered by falling commodity prices and soaring costs.
The document of the blue print seen by Reuters last week included boosting platinum by promoting the metal as a central bank reserve asset.
Mines Minister Ngoako Ramatlhodi said the government planned to negotiate this issue with South Africa’s central bank and the New Development Bank which has been launched by the BRICS group of emerging economies.
“I had hoped we can reach a point where it says ‘I promise to pay the bearer in platinum equivalent’ to add to the basket, so we are looking at internal promotion,” he said.
South Africa sits on close to 80 percent of the world’s known reserves of platinum, a metal used in emissions-capping catalytic converters which is facing depressed demand.
Platinum’s spot price XPT= is pinned near 6-1/2 year lows below $1,000 an ounce.
Commitments to delay lay-offs, sell distressed mining assets instead of closing them, and the creation of a “development fund” to provide possible employment to laid-off miners are also part of the plan.
Ramatlhodi said almost 12,000 mining jobs were on the line in South Africa, which has an unemployment rate of around 25 percent and glaring income disparities.