Looking at the bright side

Lat­est re­port viewed too bullish by some de­spite wide price pre­dic­tions

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PRE­CIOUS MET­ALS trad­ing firm John­son Matthey (JM) is pre­dict­ing the platinum price could range be­tween US$700/oz and $1 400/oz over the next six months. One key vari­able will be the action of in­vestors through the ex­change-traded funds that played a ma­jor part in driv­ing the platinum price down to the cur­rent low lev­els of around $800/oz when they sold un­ex­pect­edly large quan­ti­ties of platinum in third quar­ter 2008.

An­other is likely pro­duc- tion trends from South African mines now start­ing to cut back on out­put, plus de­layed ex­pan­sions in re­ac­tion to cur­rent rock-bot­tom prices.

Lat­est to do so is Lon­min, which has an­nounced it will shut down its Lim­popo mine and its open­cast op­er­a­tion at its Marikana divi­sion. Lon­min CEO Ian Farmer has also put the pro­posed Akanani mine on care and main­te­nance “for the short term”. He pre­dicts Lon­min’s platinum sales for the year to end-Septem­ber 2009 will be around the same level as the 732 124oz pro­duced in fi­nan­cial 2008. On pre­vi­ous fore­casts Lon­min was hop­ing to hit 900 000oz in fi­nan­cial 2008 and around 1m oz next year.

On 7 Novem­ber East­ern Platinum (East­plats) an­nounced it would in­crease pro­duc­tion at its Croc­o­dile River mine to 140 000oz in 2009 from 120 000oz this year but would de­lay and/or ra­tio­nalise the group’s other ex­pan­sion projects.

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