A GOVERNMENT and industry task team was established yesterday to aid the troubled platinum sector which is battling rising costs and a drop in prices, which fell 13% in the past three months in London.

SA supplies more than three quarters of the world's platinum.

The task team follows the closure of the Marikana mine by Aquarius Platinum and its partner, Anglo American Platinum. The companies are respectively the world's fourth-largest and the largest platinum producers.

Despite the loss of 1400 jobs, analysts hailed the move to shut Marikana, in Rustenburg, and urged other South African producers to consider a similar course of action in order to balance the oversupplied market. Platinum producers have long complained about a drop in demand and rising operational costs including labour, electricity, chemicals and water among others.

A meeting between platinum producers, Mineral Resources, Minister Susan Shabangu and labour yesterday agreed to the establishment of a task team, led by the department, to come up with short-term and long-term initiatives to mitigate the problems of the sector.

"As a result of the meeting all parties agreed on a process to address current challenges facing the platinum sector with a view of putting in place a short-and medium-to long-term plan," said Department of Mineral Resources spokeswoman Zingaphi Jakuja.

Impala Platinum spokesman Johan Theron described the current climate for producers as "almost a perfect storm". In the past five years, revenue streams had remained the same but in the same period wages and operational costs had doubled.

Yesterday's meeting was the first gathering of all players in the sector and began with sharing information on the prevailing situation.

Labour representatives present at the meeting expressed concern over more job losses in the wake of the problems experienced by platinum producers.

National Union of Mineworkers (NUM) education secretary Ecliff Tantsi said the union would attend to the situation on a company-to-company basis in order to come up with mechanisms to counter possible job cuts. The union was currently in talks with Aquarius over its 1100 members affected there.

NUM general secretary Frans Baleni said last week the union would consider court action against the job losses at Aquarius, citing the mine's company's alleged failure to follow procedure.

Leigh McMaster, head of sustainable development at the Solidarity trade union, said it was agreed that the task team would come up with short-term solutions in the next two weeks. The team would meet again next Monday.

With Bloomberg