Amplats’ Griffith holding thumbs Govt will approve platinum coin

AFTER years of on-off negotiating, South Africa’s platinum sector is no closer to extracting an agreement with its government on minting an investment coin – a state of affairs that has Chris Griffith, CEO of Anglo American Platinum (Amplats) scratching his head.

“I fail to understand why we can’t leverage the Krugerrands success into platinum,” he said at a recent gathering with journalists. “There’s just been a lack of development.” Asked the nature of the South African government’s objections, he replied: “We still don’t know”.

It’s the fiftieth anniversary of the first Krugerrand on July 3. Its advent was the collapse of the gold standard which triggered a response to promote gold by some other means, especially as South African then produced about three-quarters of the world’s gold.

“Krugerrands were mass produced to enable the ‘man in the street’ to purchase gold easily and with confidence,” said the Chamber of Mines in a statement. “Since that time, more than 60 million Krugerrands in all sizes have been minted with the blanks being stamped out at South Africa’s Rand Refinery,” it said.

By the Eighties, the refinery was also producing the fractional Krugerrands of half an ounce as well as a quarter and tenth of an ounce so that the smaller buyer could buy gold at an affordable price. The rest is history.

What’s key in the history of Krugerrand is the recognition that gold would need an extra push given its centrality to the economy at the time. Whilst South African only produces a fraction of the gold of 50 years ago, it remains the dominant platinum producer in an industry which is stricken.

Analysts of various stripes maintain that the platinum market is roughly in balance, or even in a supply deficit but above ground stocks of between one million to two million ounces, and only tepid industrial growth, is keeping the lid on its dollar price.

If ever there was a good time to find another means of promoting platinum, this would be it. But as has become common, the rest of the world is eating South Africa’s lunch after the UK’s 1,000-year old Royal Mint on May 15 launched a 500 gram and kilogram platinum bar.

These products will be followed in the next few weeks by a 100g and one ounce platinum bar as well as – wait for it – a one ounce ‘Queen Beasts Lion of England’ coin – the first platinum coin to be launched in the heraldic series.

“Platinum has got many of the investment characteristics of gold and it certainly can be a store of wealth. Despite the slow progress in the past, recent engagements with the government have given the South African platinum producers hope and optimism that our great Nation will too one day have a platinum coin that, like Krugerrand, will be world renowned,” said Griffith who would also like the National Treasury to consider using platinum as a reserve currency.