Russia and South Africa have revealed plans to launch a trading bloc for precious metals to lessen volatility in the price of platinum.

The two countries hold about 80 percent of the world’s platinum group metal reserves.

According to Fox Business News, this relation between Russia and South Africa will also encourage the development of the platinum market.

This is an outcome of a business meeting that Russia’s natural resources minister, Sergei Donskoi, had with the South Africa’s mineral resources minister, Susan Shabangu, during the Brics summit in Durban last week.

The two ministers had apparently struck out the details of the accord at meetings in Moscow in November last year and in Pretoria in February this year.

The two countries believe that they have a high level of technological knowledge about the mining of platinum group metals.

It therefore makes business sense for them to work together in a “mutually beneficial” plan of promoting and trading the metals.

According Fox Business News, South Africa’s ministry of mines confirmed the agreement existed but would not release more information.

South Africa’s platinum mining industry is battling to keep its mines running and productive and the state is trying to find ways and means of evading more jobs losses in the sector.

A couple of mines have already been shut down and the South African state is attempting to stop companies from undertaking further job cuts. It tried to stop Anglo American Platinum’s (Amplats) proposed plan to retrench 14.000 employees beginning of this year.

South Africa’s Amplats is the world’s largest producer of platinum while Russia’s Norilsk Nickel is the largest producer of palladium.

According to Fox Business News, South Africa produces about 80 percent of the world’s mined platinum and Russia about 40 percent of mined palladium globally.