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Platinum’s young guns
David McKay
Posted: Tue, 12 Jul 2005
[miningmx.com] -- THE supply of the world’s platinum group metals (PGMs) remains closely stitched to performance of South Africa’s currency. According to research by RBC Capital Markets, were the rand high enough to trigger all of SA’s known PGM projects output would surge 6% – well in excess of the 5m oz of platinum SA produced in 2005.
“South Africa should remain the world’s dominant source of platinum, accounting for an annual average 78% over our forecast period. That could increase to 90% if all the SA expansion projects are brought on stream,” RBC Capital Markets said in a report on 3 May.
However, supply domination on that scale is considered unlikely, partly because the rand – though weakening – will prohibit some projects from being developed. There’s also the drive towards consolidation in SA’s platinum industry following the piecemeal distribution of unused mineral
rights by Anglo American Platinum between 2002 and 2003. The trend now is to remake the jigsaw.
Says Mike Solomon, CEO of Wesizwe Platinum, an unlisted firm operating in the Ledig region of the western Bushveld: “Consolidation has got to happen. We’d like to get into the fray.” Solomon favours joint ventures with other juniors and co-operating with major mining firms seeking the empowerment points Wesizwe Platinum has in abundance.
Owned 52% by formerly disadvantaged South Africans, Wesizwe will likely be attractive to Mvelaphanda Resources, which needs to rebuild its empowerment credentials. Interestingly, Mvela has also expressed an interest in consolidating junior mining firms (see article 'We're not fat cats' - Mvela).
A surprise entrant to the platinum junior market is Loucas Pouroulis. Though past retirement age, Pouroulis appears to have lost none of his vigour that led to the discovery of
Crocodile River, a property that ended up in Barplats, in turn owned by Impala Platinum.
Financed by Nedbank Capital, Pouroulis reclaimed Barplats last year. He’s now setting about mining the property that gave Impala Platinum such heartburn. “They [Barplats] are changing the mining method to more a conventional type. For that you need flexibility, so development is required,” says Mark Tyler, who heads Nedbank Capital’s resources team.
The success of Aquarius Platinum, both in finding resources in Zimbabwe and more recently in SA, has fuelled a number of other entrants. Might this lead to new blood on Johannesburg’s listed platinum sector? Certainly Ridge Mining, formerly Cluff Mining, is considering a secondary inward listing on the JSE Securities Exchange. “We’re talking to Ridge Mining and we’ll be keen to see that listing happen,” says Tyler.
However, one problem regarding the inward secondary listing was that shares had to be borrowed from London
for first-time traders in Johannesburg. The result was low demand on the JSE.
Noah Greenhill, who heads the JSE’s venture capital market AltX, says these problems have been resolved. “The constraints that existed with Aquarius have been resolved. Brokers can now buy shares in London and bring them over to SA.”
Will that inspire other platinum listings by foreign juniors operating here? Canada’s Platinum Group Metals bemused South Africans recently by holding a lunch in Johannesburg to celebrate its shift to Toronto’s main board from the venture capital market. It has no apparent plans to list here.
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