At­trac­tive nui­sance

For­mer nui­sance metal be­comes handy profit kicker

Finweek English Edition - - Economic trends & analysis - GARTH THE­UNIS­SEN

LIT­TLE KNOWN plat­inum group metal, ruthe­nium, is a handy in­di­ca­tor of just how deep the com­modi­ties boom has pen­e­trated.

Thanks to the soar­ing de­mand for hard disk stor­age drives, the ruthe­nium price re­cently broke through the US$700/oz mark for the first time ever. That’s be­cause ruthe­nium is a key coat­ing ma­te­rial in the man­u­fac­ture of hard drives and thanks to a change from “lon­gi­tu­di­nal mag­netic record­ing” to “per­pen­dic­u­lar mag­netic record­ing”, the thick­ness of ruthe­nium coat­ings has dou­bled.

Yet there was a time when Ruthe­nium was re­garded as a nui­sance. With his­tor­i­cal prices rang­ing be­tween US$50/oz and US$200/oz, ruthe­nium of­ten had to be stock­piled un­til the sell­ing price had reached at­trac­tive lev­els.

But JP Morgan now reck­ons this for­mer nui­sance metal could be­come a handy “profit kicker” for SA plat­inum min­ers, par­tic­u­larly those ex­posed to UG2 reefs where ruthe­nium is most plen­ti­ful. “We be­lieve there’s a good chance that this forgotten metal will move into four dig­its soon,” says JP Morgan.

So in­vestors might want to keep a close eye on the likes of Lon­min (with 75% of op­er­a­tions ex­posed to UG2), Im­plats and An­glo­plat (50%) and Northam (35%).


Source: I-Net Bridge

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