ASX- and Aim-listed platinum producer 
 Platinum Australia expected to grow its 
 production to about 240 000 oz of platinum, palladium, rhodium and gold (4E) platinum-group metals (PGMs) by 2014.

Platinum Australia MD John Lewins said at the Diggers and Dealers Forum, in Australia, last week, that the company would produce about 85 000 oz of 4E in the 2009/10 financial year, with production to come from its flagship project in South Africa, the Smokey Hills platinum mine.

Lewins told the forum that it had reduced its debt at the mine to R125-million, down from R325-million.

He noted that Platinum Australia was one of the lowest cost producers in the PGMs industry, with the Smokey Hills project’s average production costs amounting to about $350/oz, compared with the industry average of $650/oz of 4E PGMs.
Meanwhile, production at the producer’s joint venture (JV) Kalahari Platinum (Kalplats) project, in South Africa’s North West province, would likely start by late 2011, with an expected output of between 
120 000 oz/y and 140 000 oz/y platinum, palladium and gold (3E) PGMs.

Platinum Australia had entered into a JV agreement with South African platinum-miner African Rainbow Minerals (Arm), in terms of which it could earn up to a 49% interest in the project by completing a bankable feasibility study.

Further, the company had already completed 
a portion of a drilling programme as part of the extension of the Kalplats project, with further drilling of targets to continue into 2010.

The extension project formed part of its agreement with Arm. The parties had 
applied for prospecting rights covering an area about 20 km north and 18 km south of the Kalplats project.

Meanwhile, Lewins highlighted that, 
despite the global economic crisis, there was still 
demand for platinum in autocatalysts, boosted 
by stricter emissions regulations in the US and in Europe, while new standards were also being implemented in other parts of the world, such as China and India.

Further, there were also “strong” signs of increased demand for platinum jewellery at current prices, he noted.

While demand from the glass and chemicals industry had been affected by the economic slowdown, demand was projected to grow at about 3% a year in the long term.

Platinum was also being used in new applications, such as fuel cells or in the biomedical industry, he pointed out.

The platinum supply, on the other hand, was expected to remain flat in 2009, said Lewins.

He explained that global production had dropped by nearly 10%, to six-million 
ounces, between 2006 and 2008.

Production by South Africa, which produced about 76% of the world’s supply, dropped for a third consecutive year to 4,53-million ounces 
in 2008.

The country’s production would remain flat this year, as a number of mines had been closed and significant cutbacks in capital 
expenditure projects were made as a result of the global economic slowdown, and continued safety and industrial action, said Lewins.

He added that mining operations in South Africa continued to face significant cost pressures, including inflation, increased electricity costs, union demands, declining grades and high interest rates, besides other things.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.