Approximately 72% of the world’s platinum is produced in South Africa. When planning an investment or purchasing a car, most people don’t consider that. However, that figure is crucial inside the nation’s mining belt, where electricity powers hoisting, ventilation, and pumping machinery in deep shafts hundreds of meters below the surface. Additionally, the electricity has been unreliable for years.
The grid failure in South Africa is not a tale of abrupt collapse. The slow unraveling began long before most commodity analysts or investors became aware of it. Eskom’s own analysts predicted in 1998 that if nothing was done, the nation’s power supplies would run out by 2007. There was no action taken. And the blackouts started in 2007.
Decades of poor management were then added to deteriorating infrastructure. In the 2020s, power plants that were put into service in the 1970s and 1980s—many of which were built with a 30-year lifespan—were still operating and experiencing more malfunctions than they were producing. Eskom, the utility bearing this burden, received government bailouts totaling more than 270 billion rand, accrued debt exceeding 400 billion rand, and was still unable to keep the lights on. It is difficult to comprehend the scope of that financial failure. This isn’t a rounding error. It’s an operational issue masquerading as a structural collapse.
Loadshedding has been a difficult experience for regular South Africans. The outages lasted up to 11 hours every day at their worst, Stage 6, which was reached in 2023. Generators were used by businesses. Backup systems in hospitals were strained. Retailers observed the spoiling of refrigerated goods. Ten years of load shedding caused an estimated 338 billion rand in economic damage, according to estimates from the Council for Scientific and Industrial Research. The economic cost was estimated to be between 60 and 120 billion rand in 2019 alone. These figures are not abstract. They stand for small businesses that failed, factories that operated at half capacity, and an investment environment that subtly became antagonistic.
This story extends beyond the boundaries of South Africa through the platinum angle. By its very nature, mining uses a lot of electricity for processing, water pumping, ore hoisting, and ventilation shafts. It becomes challenging to defend underground mining solely on the basis of safety at Stage 6 load shedding. Without dependable power to sustain the environment, miners cannot go underground. This is not a problem for operations. That’s a stop to production. Additionally, the global supply curve changes when a nation that produces almost three-quarters of the world’s platinum begins to regularly halt production.
The precise amount of platinum production lost over the last ten years due to blackout-related disruptions is still unknown. Mining firms have been hesitant to release detailed data, in part due to competitive concerns and in part because it is genuinely difficult to distinguish between losses caused by load shedding and other operational difficulties. However, it’s easy to read the overall trajectory. South Africa’s PGM output has been under constant pressure, but global demand has been shifting in the opposite direction due to growing hydrogen fuel cell technology and stricter internal combustion engine emissions regulations.
A tentative improvement is worth praising. South Africa has not experienced load shedding since May 2025. With private homes and businesses investing an estimated 75 to 80 billion rand in solar systems producing more than 5 gigawatts of capacity, rooftop solar adoption has increased dramatically in recent years. It’s a significant addition. In a sense, it’s also a silent indictment of a nation’s citizens creating a parallel power structure because they couldn’t trust the official one.
The structural vulnerabilities remain unresolved, which is the deeper issue. The fleet of coal is getting older. The procurement of new renewable energy has been sluggish. Additionally, the political will to make difficult choices regarding the energy transition has frequently faltered, leaving investors who might otherwise support new generation capacity uncertain due to ministerial disputes and policy reversals.
It’s difficult to shake the impression that the platinum market’s relative calm on this front won’t last forever as you watch this situation develop over time. The supply implications for platinum, palladium, and rhodium would quickly spread if load shedding resumes at scale, and history indicates that ignoring that risk is foolish. Risk is typically priced in commodity markets only after the disruption becomes apparent. The adjustment is rarely gentle by that point.
