South African platinum miner shutters mines
- Published: Aug 7, 2018, 4 AM
The spot price of platinum per troy ounce spiked sharply Aug. 2 after the announcement that South African platinum miner Impala Platinum would greatly reduce precious metal output, shuttering five of its 11 mines over the next two years.
BullionVault.com reported that platinum prices jumped 2.5 percent in London trading within two hours following the announcement.
“The platinum price began moving higher at the start of New York trade, gaining $20 per ounce — some 2.5% —inside 2 hours while gold, silver and palladium held flat,” according to Bullionvault.com. “Speculators in New York-traded platinum futures and options have recently built a record short position, betting against the metal recovering from its recent plunge to 14-year lows beneath $800 per ounce.”
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The move by Impala, the world’s second largest platinum miner, will drop annual production to 520,000 ounces from current levels of 750,000 annually. The production cuts will push Impala’s output below that of Lonmin, another troubled platinum mining operation, which yields 650,000 ounces annually.
Lonmin, a producer of platinum group metals operating in the Bushveld Complex of South Africa, is currently the object of a takeover bid by Sibanye-Stillwater. Sibanye-Stillwater is the largest individual producer of gold from South Africa and is one of the 10 largest gold producers globally. Sibanye-Stillwater is also the third largest producer of palladium and platinum.
Sibanye acquired the Stillwater mining operations in Montana in 2017.
Impala is ceasing mining activity at locations that are at the end of their productivity or where operations are currently unprofitable but future production may still be available.
According to the precious metals consultancy Metals Focus, South Africa’s platinum production in 2017 was losing $27 an ounce based on the average price per ounce of $1,080.
Platinum prices have dropped another 15 percent so far in 2018, averaging $913 an ounce.
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