Former nuisance metal becomes handy profit kicker
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%).