LONDON (Scrap Register): Global platinum production has fallen only 5% since 2011 even though prices have fallen some 50%, said Metals Focus.

Companies have maintained their output largely as a result of cutting total cash costs, the consultancy explained. South African output is down slightly more – at 9% -- since this is primary output rather than platinum mined as a by-product of other metals.

However, a 9% drop since 2011 with prices down 50% is nonetheless a somewhat surprising performance.

During 2011 in South Africa, the average total cash cost of producing an ounce of platinum equivalent was $1,264/oz and $1,569/oz on an all-in sustaining cost basis; all other things being equal, the entire South African industry would be loss making at today’s prices.

However, by 2016, the average total cash cost had fallen to $868, or $975 on an AISC basis. The main factor behind lower costs has been the sharp depreciation of the South African rand. That being said, some 50% of the industry was still under water during 2016 using the AISC basis, Metals Focus added.

Still, with South African unemployment of some 25%, companies would face a political backlash if they cut too many jobs, Metals Focus continued.

“In addition, the mines are large, complex operations with high sunk costs, making mine closures a last resort,” Metals Focus noted.