Tak­ing a gam­ble on plat­inum

CEO Johnny Cope­lyn de­nies spec­u­la­tion of plans to mop up other low-priced op­por­tu­ni­ties in the sec­tor

Financial Mail - - MONEY&INVESTING - Marc Hasen­fuss hasen­fussm@ti­soblack­star.co.za

Hosken Con­sol­i­dated In­vest­ments (HCI), best known for its in­vest­ment in gam­ing and leisure group Tsogo Sun, is hav­ing a flut­ter on the be­lea­guered lo­cal plat­inum min­ing sec­tor.

The group’s lat­est an­nual re­port dis­closes a typ­i­cally ad­ven­tur­ous $6m in­vest­ment in Cana­dian-listed min­ing ex­plo­ration com­pany Plat­inum Group Met­als, which is prospect­ing a pal­la­dium and plat­inum re­source in the Water­berg area.

The in­vest­ment snags HCI a use­ful 15% stake in Plat­inum Group Met­als, as well as board rep­re­sen­ta­tion and a seat at the ta­ble of the jointven­ture project ar­range­ment with Jse-listed Im­pala Plat­inum.

This is not HCI’S first re­source in­vest­ment. The group al­ready owns size­able in­vest­ments in the coal sec­tor and in en­ergy through Im­pact

Oil & Gas.

HCI CEO Johnny Cope­lyn has played down any spec­u­la­tion that HCI is look­ing to mop up other low-priced op­por­tu­ni­ties in the plat­inum sec­tor. He em­pha­sises that Plat­inum Group Met­als of­fers a low-cost op­por­tu­nity to en­ter the sec­tor, and should not be in­ter­preted as HCI hold­ing grand am­bi­tions in min­ing.

“It’s not an ex­trav­a­gant in­vest­ment … and [it’s] much smaller than what we have in­vested to date in Im­pact,” he says.

In his an­nual re­view, Cope­lyn con­cedes that plat­inum mines have “strug­gled ter­ri­bly” for a num­ber of years, with plat­inum prices sink­ing to a point where sev­eral mines ap­pear to be mak­ing such deep losses that there is lit­tle hope for their sur­vival.

He adds that the com­mod­ity price seems likely to re­main un­der pres­sure as the au­to­mo­tive in­dus­try moves to­wards elec­tric cars, which do not re­quire plat­inum-con­tain­ing cat­strengthen

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