Platinum Kruger Rand “may help stop the rot’

[] — PLATFIELDS CEO Bongani Mbindwane says the
introduction of a platinum coin, similar to gold’s Kruger Rand, could create a new
long-term source of demand for the beleaguered sector.

Mbindwane said this was one of several initiatives that government could implement
to spur growth in the sector, which is battling rising costs and a drop in prices.
Dubbing such a coin the Mandela Rand, Mbindwane said it would push long-term
demand for the metal as a wealth store and safe haven.

“If the Kruger Rand did magic during the gold slump, only a less imaginative mind
will fail to see the Mandela Rand doing triple that,’ he said. “The South African
mining industry has seen difficulties before, caused by either exchange rates or slack
demand. The solutions have always come from within and not from external or
global factors alone.’

Another potential remedy is the extension of mining and prospecting rights across
the board for all companies in the platinum sector, in particular those rights due for
renewal within 24 months. “This will remove investor jitters and secure the long-
term investment nature of mining as an investment class,’ Mbindwane said. “The
minister could do this in terms of her powers.’

He further proposed that the South African Reserve Bank should consider including
platinum in its reserves diversity by buying at least one million ounces over the next
three years to add to the four million ounces gold the bank currently holds; a
proposal that could be taken further to other Brics member nations.

Mbindwane also proposed the formation of an OPEC-like organisation for platinum
and PGM-producing countries that could coordinate production planning and
research. Together with this would be the establishment of a platinum marketing
council to promote the metal’s business fundamental and facilitate research.

A proposal that could be useful for a company such as Platfields is the availability of
R3.5bn as a rescue fund for junior explorers that have spent at least R10m of own
funds in the preceding three years. The fund is to be administered by the Minister of
Mineral Resources.

Platfields’ shares are currently languishing at around 3c, down from around R1.40 at
the time of its listing in December 2010.