BLBG: Platinum Price Could Get Boost From South African Safety Stops
South Africa, supplier of more than three-quarters of the world’s platinum, stepped up mine interruptions for safety checks, cutting supplies and potentially boosting the price.
Anglo American Platinum, the world’s largest producer, posted a 19 percent drop in fourth-quarter output today, saying government-ordered stoppages more than doubled to 81 last year. “Uncharacteristically” high numbers of safety halts “severely” affected production, according to Lonmin Plc, the third-largest producer.
Reduced supplies may help stem the decline in platinum prices in the past half-year. The metal, along with copper, nickel and other materials declined as prospects for global economic growth dimmed. Platinum lost 11 percent in the past six months to trade at $1,609.50 an ounce as of 1:19 p.m. in London.
“A continuance of safety-related stoppages is having an impact on the supply side for a number of platinum producers,” London-based Fairfax I.S. Plc said in a note. “This is a positive for platinum prices.”
Most of the world’s platinum, used in car emission devices and jewelery, is produced from mines tapping the Bushveld geological complex in the north of the country. The government in 2007 started temporarily shutting gold, platinum and coal mines following accidents to reduce fatalities which stood at 128 last year.
Lower Output
Platinum output in South Africa had an “unprecedented” drop in October as the government increased mine inspections, J.P. Morgan Cazenove said last month. Platinum group metals production slumped 36 percent in October from September, and fell 27 percent from the same month a year earlier.
The Department of Mineral Resources appointed an additional surpervisor in the Rustenburg region in the last quarter of last year as “we weren’t seeing an improvement,” in safety, David Msiza, national chief inspector, said by phone today. About 30 percent of mining accidents occur in the platinum industry, he said. “There clearly has been an improvement since,” he said.
While official statistics have not yet been released by the Department of Mineral Resources, at least 116 miners died this year, National Union of Mineworkers’ spokesman Lesiba Seshoka told Bloomberg today.
Platinum fell 11 percent over the past six months and traded at $1,609.50 an ounce as of 12:44 p.m.
To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
