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SA mines hold Pt deficit in hands Posted: Mon, 15 May 2006 [miningmx.com] -- PLATINUM production from South Africa would play a critical part in containing the supply deficit for the metal in 2006, but there was little room for error. Figures from metal semi-fabricator, Johnson Matthey, which conducts twice yearly research on the platinum group metal market (PGM), show demand for platinum continuing to outstrip supply, notwithstanding the pressure of high prices on the Chinese jewellery market. Investment interest in the metal continued, but Johnson Matthey’s Mike Steel, said the price hikes in which platinum has become 50% more expensive since the beginning of 2005, was “unsustainable”. Steel said there had been increased non-specialist interest in platinum partly as an spillover from wider confidence in all commodity metals. “Pension funds are moving into metals, but PGMs are not specifically tracked,” Steel said. Johnson Matthey said platinum would trade between $1,025/oz and $1,250/oz over the next six months. The platinum price was last quoted at $1,278/oz. Palladium, a sister metal, was expected to pass through $400/oz, but considerable downside risk remained. South Africa increased platinum supply 2% in 2005 to 5.1 million oz. “It should have been higher,” said Steel. “New mine developments are moving slower than originally planned. Not all of them, but most of them,” he said. A snarl up in the expansion of Anglo Platinum’s Polokwane removed an additional 120,000 oz of platinum from the market in 2005. With platinum demand for diesel autocatalysis likely to increase in 2006, growth in South African mine supply was important to keeping the platinum supply deficit to a minimum. “If supplies from South Africa increase as planned, Johnson Matthey expects the platinum market to remain in moderate deficit in 2006,” the UK research house and semi-fabricator said in its 2005 annual review. In addition to metal locked up at Anglo Platinum’s Polokwane, more production was expected from new producers such as Eland Platinum. Established producers were also expected to contribute more production such as Barplats which eventually hopes to lift output to 250,000 oz/year. Additional production from Zimbabwe was likely to be modest, said Steel. This was owing to political uncertainty over plans by the Zimbabwean government to take economic interests in mining companies operating in its borders, Johnson Matthey said. JP Morgan analyst, Steve Shepherd, suggested that a preference for platinum in diesel autocatalysis over palladium, particularly in the US, might influence the types of mines that could be developed in South Africa. “I’m sure all South African miners are aware this is a possibility,” said Steel.Free news
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