South Africa’s platinum supply might rise a touch next year after falling slightly this year on safety-related stoppages and wage strikes, Johnson Matthey (JM) said yesterday.
The producer of four-fifths of the world’s platinum would see supply fall by 1 percent this year from last year to 4.59 million ounces, the refiner said.
“We’re fairly confident that supply in South Africa will be modestly up next year,” said Jonathan Butler, the publications manager at JM.
“A lot depends on the strength of the rand… we are starting to see perhaps a slowdown in new investment because of that,” he added.
The rand, up nearly 27 percent since the start of last year, has been eating into profits of mining companies who sell their metals in dollars and pay their costs in rand.
“But overall we see in the near future that no mines are being closed down,” added Butler. “In the next six months, (there will) certainly be a more positive supply situation for South Africa.”
Palladium supplies are expected to rise to 2.49 million ounces this year, while supplies of rhodium are expected to drop to 612 000 ounces.
“It’s been a very difficult year for the industry, with disruptions due to strikes, safety stoppages, smelter incidents and some mines have also reported lower output this year due to the shaft closures that we saw in 2009,” said Alison Cowley, an analyst at JM.
However, Cowley said there was optimism for next year. “Costs are coming under control. We do expect a little bit of growth in production in South Africa, mainly on the back of recovery at some of the longer-established mines.”
Global supply of platinum, used in auto catalytic converters to remove pollutants from exhausts and in jewellery, was expected to remain almost flat at 6.01 million ounces, JM said.
For this year, Anglo Platinum (Angloplat) is expected to meet its target of 2.5 million ounces of refined platinum.
“South African production of platinum is likely to be strongly weighted towards the second half of 2010, particularly for two of the major producers, Angloplat and Lonmin, as stocks of unrefined platinum are processed,” JM said.
Output of platinum in concentrate at Lonmin’s Marikana mines rose 9 percent to 318 000 ounces in the first six months of the year.
Its total output is expected to improve further in the second half, boosted by production from new shafts and the recently reopened Merensky open pit.
Production at Impala Platinum (Implats) has slowed following a major accident last year, but it forecasts output from its lease area to recover to 1 million ounces within five years. Platinum output in Zimbabwe, with the world’s second-largest reserves, is expected to increase by 50 000 ounces to 280 000 ounces this year, mainly because of a jump in production at Zimplats Holdings, in which Implats has a majority stake. – Reuters
