* Platinum's prospects now as poor as gold
* Platinum price less than half 2008 peak
* 70 pct of shafts in S.Africa losing money - Implats
By Ed Stoddard
BRITS, South Africa, Oct 21 (Reuters) - When South Africanminer Papi Soke went from gold to platinum, he thought he wastrading a sunset industry for one with a brighter future.
This month, the National Union of Mineworkers (NUM) shopsteward was one of over 800 workers laid off at the Elandplatinum mine, closed by Glencore.
"I don't know what to do now. I am thinking of maybe goingto a diamond mine," the 34-year-old father of two, whose wife isexpecting in December, told Reuters as he sipped juice in a mallin the mining town of Brits north of Johannesburg.
Glencore is not alone. Platinum producers Lonmin andAnglo American Platinum are also planning to cut jobsand the government has held meetings with companies and unionsto try and prevent widespread lay-offs.
Impala Platinum is closing operations that willaffect 1,600 jobs but it has said it hopes to absorb many ofthose workers elsewhere in its business.
As South Africa's gold industry - which has produced a thirdof the bullion ever mined - began a steady slide in the 1990s,platinum was expected to fill part of the gap. But platinum'sprospects are now as dire as that of gold.
The local industry is still recovering from a five-monthstrike last year, and an oversupply and low demand has pushedthe price of the metal used in autocatalysts and jewellery downalmost 40 percent from 2014's peak.
This month it slid to seven-year lows below $900 an ounce onworries about a drop in demand for diesel cars after carmakerVolkswagen admitted rigging diesel emissions tests.
Diesel autocatalysts account for 40 percent of globalplatinum consumption, so weaker demand for diesel cars willfurther hurt the metal's price. It's now trading over $1,000,but is still less than half the $2,290 peak it hit in 2008 andthe outlook remains bleak.
"At current prices, fully 70 percent of the platinum shaftsin South Africa are losing money, across the industry, by ourcalculations," said Implats spokesman Johan Theron.
A Reuters poll last week pegged an average platinum priceforecast for 2016 at $1,105.50 an ounce, 12 percent below theforecast of a similar poll conducted three months earlier.
Further job losses are certain, a sensitive issue inAfrica's most advanced economy, where the unemployment rate isaround 25 percent, the mining workforce is restive, and incomedisparities are glaring.
The layoffs may prove a serious test for the ruling AfricanNational Congress (ANC) in local elections next year, as itcounts on a declining base for much of its political support.
"The industry is in a tough space and the companies have todo what's necessary to ensure they survive," said Roger Baxter,the chief executive of South Africa's Chamber of Mines.
Lonmin said on Wednesday it planned a $400 million rightsissue of new shares, a last-ditch effort by a company on thebrink.
CHANGING FORTUNES
In 1987, according to Chamber of Mines data, there werealmost 554,000 people working in South Africa's gold sector.Platinum that year employed around 83,000.
But as the century-old gold mines around Johannesburgplunged deeper into the earth for lower grade ore, pushing upcosts, the industry began shedding jobs.
Soke's father was among those.
"He worked in the gold mines for 25 years, but in 1996/97,when the price went down, he lost his job. I now support him."
As the fortunes of the industries changed, platinum beganemploying more miners, picking up some of the men who lost theirjobs in gold.
In 2006 for the first time, platinum's employment levelsexceeded gold's, reaching 168,500 compared to 160,000.
In early 2008, when platinum scaled its record peak ofalmost $2,300 an ounce, its premium over gold was $1,257. Gold's premium over platinum is now $165.
Soke made the switch in 2008, after five years at a mine runby Harmony Gold.
"Harmony offered a voluntary retrenchment package and Iswitched to platinum to advance my career," he said.
South Africa sits atop about 80 percent of known reserves ofplatinum. The industry still has a larger labour force, but itsnumbers peaked in 2008 at almost 200,000. It was 188,400 lastyear and will almost certainly decline from here.
In 2014, only Anglo American Platinum among the bigproducers had a positive return on equity (ROE) - which measures a company's profitability - of 1.2 percent, according toThomson Reuters' data.
Northam Platinum's was -10.1 percent, ImpalaPlatinum was at -7.1 percent and Lonmin was -5.7percent.
In gold, Harmony was -15.1 percent but two of the big goldproducers were positive - Gold Fields was 0.3 percentand Sibanye Gold was 12.9 percent.
Sibanye, the most profitable bullion producer in SouthAfrica, offers a bright spot for platinum, having snapped upAquarius Platinum and Amplats' labour intensive assets.
Its chief executive Neal Froneman has said that, with theright market conditions, he might even expand the workforce.
"I wish an investor would come and invest in Eland," Sokesaid. (Additional reporting by Clara Denina and Jan Harvey in London;Editing by James Macharia and Susan Thomas)
