www.miningmx.com | mining_fin Platinum price falls as SA ups mine power

�

�

� SA mines to receive more power
� Mixed outlook for gold juniors
� Homeland weighs building SA power plants
� Platinum producers get more for less
� SA govt to act on power-related mine job cuts
� Xstrata still believes in South Africa

� JSE:ANGLO PLATINUM LIMITED:
126300c

Platinum price falls as SA ups mine power
Allan Seccombe
Posted: Fri, 07 Mar 2008

[miningmx.com] -- PLATINUM prices deflated sharply on Friday after the South African government confirmed mines would receive 95% of their average power consumption after running at 90% for a month.

The Department of Minerals and Energy (DME) said the increased power allocation of 256 megawatts for the mining sector would be phased in over the next two weeks.

"This agreement has been reached to alleviate the heavy disruptive burden and possible large retrenchments," the DME said.

Platinum dropped to $2,065/oz before climbing back to $2,126. The price hit an all-time high of $2,290/oz, the peak of a run triggered by concerns about platinum supplies out of South Africa, the world�s largest supplier of the metal used mainly to make autocatalysts and jewellery.

Anglo Platinum, the world�s largest producer, has said it estimates it will shed 150,000 oz because of the power outage. It is unwilling to give a revised forecast just yet because it is dealing with the flooded Amandelbult mine and the shutdown of the Polokwane smelter.

�The 10% reduction in power consumption led to a five percent drop in production. That was possible because we have spare concentrating capacity because we can juggle mining, smelting and refining loads,� said spokesman Trevor Raymond.

�We could, hopefully, improve with 95%. We welcome the increase in power and we are positive about it, but we don�t wish to give a forecast. Besides, we probably wouldn�t because we can�t use 90% or 95% because Amandelbult and Polokwane are out,� he told Miningmx.

�We are using well below 90% anyway, so it won�t make any immediate difference.�

Click Here to subscribe to our daily newsletter

Impala Platinum estimated that the extra five percent would mean the loss in annual production would be just one percent instead of the two percent at 90%.

Impala CEO David Brown estimated in February that full-year production would be below two million oz compared to 2.026 million oz in 2007.

Overall, the mining industry said the increase in electricity would mean jobs could be saved, a critical point for the South African government, which has as two of its key platforms job creation and poverty alleviation.

�The mining sector is confident of its capacity to create many more jobs provided it receives the electricity required to ensure optimal production,� the Chamber of Mines said in a statement.

�In this context, it is hoped that today�s 260 megawatt increase announcement will be the first step by Eskom in getting the entire mining sector back, as quickly as possible, to a full and uninterrupted supply of power,� it said.

Gold Fields recently estimated at 90% power consumption it would have to shed nearly 7,000 jobs, mothball shafts and delay a depth extension project.

�As soon as the specific additional allocation for each of our mines is confirmed, we will review our mine plans and production profiles, with a view to increasing production near to levels prior to those before the reduction in power supply,� said Terence Goodlace, the head of Gold Fields� South African operations.

�