PERTH (miningweekly.com) - ASX- and Aim-listed Platinum Australia on Thursday said that demand for platinum would outstrip supply between 2010 and 2016, as the production from South Africa, which accounts for about 75% of the world's output, remained flat.
Platinum Australia MD John Lewins told the Africa Downunder conference that South Africa's platinum production had declined for the past three years, and was expected to remain flat during 2009, despite the significant growth in the metal's price.
Lewins stated that the decline was largely owing to the closure of platinum mines by companies such as Aquarius Platinum and Lonmin, as well as cutbacks on capital expenditure by miners such as Anglo Platinum, Lonmin and Impala Platinum.
Inflation and cost pressures also had an influence on production levels, as well as the ever-deepening depths of operations and the lower grade of the ore produced. Industrial action by the labour unions also had a negative effect on the level of production from South African producers.
Lewins noted that lead times for planned mines were also significant, with mines taking between five and seven years to start production.
"South Africa will obviously still dominate this area, but electricity, inflation, safety, depths and industrial unrest remaining as big issues."
Lewins stated that Platinum Australia was set to fill the anticipated demand deficit with its three operations in South Africa.
During 2010, the miner was expected to produce 85 000 oz of platinum group metals (PGMs), increasing this to 240 000 oz of PGMs by 2014.
Platinum Australia currently had three projects in South Africa, the first of which is the Smokey Hills mine, producing between 95 000 oz/y and 100 000 oz/y of PGMs. It has a contained resource estimate of one-million ounces.
It also owns the Kalahari Platinum (Kalplats) project, which would produce between 120 000 oz/y and 140 000 oz/y.
Platinum Australia was currently completing the feasibility study on Kalplats, and was expecting to deliver final data by next week.
The company also recently acquired the Rooderand project, in the western limb of the Bushveld Complex, which has a three-million ounce resource. Platinum Australia is awaiting a prospecting licence for the project.