Platinum Group Metals Says Bushveld Production to Begin in 2013
By Mike Cohen, Bloomberg
Feb. 9 (Bloomberg) -- Platinum Group Metals Ltd., a Canadian mining company, said it�s begun developing a mine in northern South Africa with first production scheduled to start in 2013.
The company owns 74 percent of two projects in an exploration area in South Africa known as the Western Bushveld Joint Venture. One of the projects is the new mine, which will require an estimated capital investment of $443 million and produce platinum, palladium, rhodium and gold.
�We�re in the process of starting construction,� Chief Executive Officer Michael Jones said in an interview in Cape Town yesterday. �We expect a bulk sample permit to be issued in the next week or two. That will be on time for our initial investment of $100 million� into the project, he said.
Platinum Group, based in Vancouver, also secured funding from state-owned Japan Oil, Gas and Metals National Corp. last year to begin exploration at its War Springs and Waterberg projects on the northern limb of the Bushveld Complex. Drilling is already under way, Jones said.
Platinum Group�s future exploration will focus on Canada, where promising new palladium and platinum deposits have been identified, he said. The company has no intention of entering Zimbabwe, which has the world�s second-biggest platinum deposits after South Africa, Jones said.
Demand Outstrips Supply
The price of platinum has risen 24 percent over the past 12 months, following a rebound in the global economy. Platinum and palladium are used in automobile pollution-control devices and other industrial applications.
Jones expects the price of the metal to continue climbing, as demand from vehicle manufacturers outstrips supply, and for the rand to weaken against the dollar, increasing the profitability of South African mines. The rand has gained 31 percent against the U.S. currency since the beginning of 2009.
�The strength of the rand has really knocked out the U.S. dollar move� in the price of platinum, Jones said. �We really haven�t seen a rand price increase in platinum like we have in the other commodities. There is potential for platinum to play catch up. Platinum is getting harder to find, harder to develop The market is going to remain very tight.� |