Platinum still in wrong direction, new rock crushing technology, revised charter fails to emerge

28th April 2017

By: Martin Creamer

Creamer Media Editor


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The platinum price is still too low to keep the industry from inflicting damage to itself. Bank of America Merrill Lynch made the point at the Prospectors and Developers Association of Canada in March that the platinum price would rally if platinum producers cut supply by 300 000 oz to 400 000 oz. But, in the absence of that, a continued downward trend for the industry is being forecast.

US-based independent commodities research, consulting and corporate advisory company CPM Group foresees platinum continuing to head in the wrong direction. The newly released 2016 edition of the yearly ‘Platinum Group Metals Long-Term Outlook’ report is a 300-page study focusing on critical trends in above-ground platinum-group metals (PGMs) inventories, investment demand, mine production, secondary supply and fabrication demand.

The projected CPM data anticipates both platinum and palladium adding to already large above-ground stocks, with supply and demand fundamentals continuing to require lower prices to induce investors to buy the PGMs in addition to their already sizeable holdings.

CPM believes that PGM mining companies need to refine their current operations by producing fewer ounces in the lower half of the cost curve; success in doing so will be rewarded by a relatively quick market upturn.

In short, the pursuit of value over volume across a broad primary producer front would lift platinum from its low point.

Meanwhile, on mining’s technical front, engineering group Metso has launched a new rock crushing technology that is said to decrease operational costs by 10% and increase uptime by the same percentage.

The new cone crusher, which combines the piston and rotating bowl into a single crushing unit, takes the cost pressure off aggregate producers operating in the most demanding rock conditions, without the loss of end-product quality during the lifetime of the wear parts.

On the local political front, the month of March has come and gone without the promised revised Mining Charter making its feared appearance.

However, what did pop up again unexpectedly is the word “nationalisation”, this time in association with one of new Finance Minister Malusi Gigaba’s appointed advisers, who has reportedly tabled a blueprint that puts banks, insurance companies and mines back in the line of nationalisation fire.

The Sunday Times’ Business Times reported last Sunday that the eight-page proposal, if adopted collectively, starkly contradicts Gigaba’s recent statements about sticking to fiscal discipline and inclusive growth.

Interestingly, a country that saw a radical economic shift to resources nationalisation, Venezuela, under the Presidency of the late Hugo Chávez from 1999 to 2013, was last year ordered to repay a Russian-owned junior mining company nearly $2.2-billion in compensation and interest for illegally expropriating the company’s assets without compensation in 2011.

In today’s interconnected globe, it must thus be borne in mind that for every action there can be an eventual equal and opposite reaction, which points to the need to heed a policy of social and economic balance that avoids the potential of compensatory comebacks.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor


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