Oct 30 (Reuters) – Here is a look at platinum production in
South Africa as strike-hit South African miner Lonmin,
the world’s third-largest platinum producer, plans to raise $800
million from its investors to help slash debt.
* Supply and demand – In 2011 supplies of platinum from
South Africa were a total of 4.855 million ounces – an increase
of 5 percent or some 220,000 ounces, accounting for 75 percent
of the global total. Given net global demand of 6.05 million
ounces, the platinum market was in a surplus of 430,000 ounces
last year.
* The increase in South African output was due to the
release of metal from in-process and refined inventories, with
at least 250,000 ounces of platinum supplied from South Africa
coming from above-ground stocks.
* Underlying mine output actually fell by 3 percent or
around 120,000 ounces in 2011, a year that was supposed to show
a rise in production. Safety stoppages were the main cause and
illegal stoppages added to industry troubles. In 2012 South
Africa was gripped by its worst labour unrest in decades
following a violent strike that broke out at Lonmin’s Marikana
mine in August.
* South African platinum miners Amplats, Impala Platinum
and Lonmin were under pressure even before the wave of strikes
in 2012, hit by rising labour and power costs and the expense of
safety stoppages that were part of a government clampdown on
fatalities. They have also been hammered by a steep drop in the
price of platinum, down about a third from its record high in
2008.
* Platinum’s sharp price drop has come as a result of
falling demand for the metal, which is chiefly consumed by the
automotive sector for use in catalytic converters. It is
particularly heavily exposed to the beleaguered European car
market, which has a higher concentration of diesel cars – which
use a higher loading of platinum than petrol engines – than the
United States or China. This has seen a significant decline.
Sources: Reuters/Johnson Matthey Platinum 2012
(Reporting by David Cutler, London Editorial Reference Unit)
(Editing by Keiron Henderson)
© Thomson Reuters 2012 All rights reserved
