south african "Implats" plans two platinum projects

South African company Implats may make final investment decisions on two major platinum projects this year. This was stated by the CEO of the company Nico Muller.

The company is considering expanding the Two Rivers mine in Limpopo province in South Africa and the Bimha Mupani mine in Zimbabwe, which is part of the Zimplats division, he said.

about project

The cost of the first project is estimated at 5.7 billion rands ($ 375 million), the second - 4.3 billion rands ($ 284 million).
Each of them will be completed in four to five years, with additional production in both cases estimated at 180,000 ounces of platinum per year.

As Niko Muller noted, the company's profits more than quadrupled thanks to high prices for platinum and platinum metals, creating favorable opportunities for large projects.

At the same time, the company will need to more than double the capacity of the Zimplats concentrator. It now processes about 6.5 million tons of ore per year, and the implementation of two new projects will lead to an increase in revenues by 6.7 million tons per year.

A little earlier, Ivanplats, a division of the Canadian Ivanhoe Mines, announced the possibility of a major platinum project in South Africa. The demand for platinum metals is expected to expand at a high rate in the coming years, which will contribute to the commissioning of new capacities.

two rivers mine history

South African companies - Impala Platinum Holdings Ltd. and African Rainbow Minerals Ltd, which jointly explored the Two Rivers platinum deposit began construction of the mine in 2005. The deposit is located in the Eastern sector of the Bushveld massif. The UG-2 reservoir containing platinoids has been explored. The layer explored in parallel with it is Merensky's reef located higher along the section until it is exploited because it has a lower capacity and PGM content.

The ore reserves of the UG-2 reef are 40 million tons (apparently to a depth of about 500 m) with the content of all 6 PGMs - 4.18 g / t (with a Pt: Pd ratio of 5: 3) and the proven reserves of these platinoids - 167.2 tons. It is planned to extract 2.2 million tons of ore by the underground method and extract from it 6.8 tons of platinoids (with a metal recovery factor of 81%), including 3.85 tons of platinum, 2.2 tons of palladium, and about 0.64 tons of rhodium. The operation of the mine is designed for 20 years. A system of overburden and haulage slopes will be built (at the first stage of work - shallow depth). Mining will be mechanized. The cost of building the mine is estimated at 1.2 billion rands (or approximately $ 170 million). It is expected that the first products will be received in the second half of 2006.

state and prospects of the global platinum market

Platinum quotes renewed a four-year high, surpassing $ 1,150 an ounce. Since the beginning of the year, it has risen in price by more than 8%, significantly outstripping other precious metals. The anticipation of a revival in the global economy, as well as a variety of clean energy programs, is pushing the price of the metal up. According to experts, this year prices may reach $ 1.3-1.4 thousand per ounce.

The global market value of platinum on January 21 has renewed its maximum since August 11, 2016. According to Reuters, quotes rose 3.8% to $ 1,151.5 an ounce. In general, since the beginning of the year, platinum has risen in price by more than 8%, only this week the growth exceeded 7%.

This is happening against the backdrop of less stable movement in gold and silver prices. Thus, the price of gold dropped to $ 17.86 thousand per ounce. Silver quotes were down to $ 25.7 an ounce. Since the beginning of the week, metals have added 2.3% and 4.2%, respectively.

The outstripping growth rates of platinum are associated with expectations of a global economic recovery and the global transition to clean energy. In such conditions, interest in the metal is growing, primarily from the automotive industry - platinum is used as automotive catalysts.

In December, car sales in China rose 6.4% from the same month a year earlier. The past month was the ninth in a row, although its pace slowed down compared to November when car sales in the country grew by 12.6% in annual terms. In 2021, the global automotive market may grow by almost 10%, reaching levels close to pre-crisis levels. In the largest car market in the world - China - car sales are already higher than in 2019.

The country's statistics office said the mining industry cut production in November by 11.6% compared to the same month in 2019. The indicator has been declining for nine months in a row, with the rate of decline being the fastest since June. Platinum group metals (platinum, palladium, and rhodium) output decreased by 16.1%. "The recovery of the jewelry industry around the world is of no small importance for the market, which also spurs up prices for platinum," says Merkulov, director of the analytical department at Freedom Finance.

There is a growing interest in investing in platinum from professional investors. Total assets of platinum ETFs rose 1.8 tonnes in three weeks to 121.5 tonnes, a new all-time high, according to Bloomberg. Over the past three months, the assets of such funds have grown by almost 8%.

how platinum took over the market

Over the past year, platinum has lagged behind other precious metals and is now undervalued relative to gold. Therefore, it cannot be ruled out that some of the investment funds are shifted from gold to platinum. This is indirectly evidenced by the data on gold ETFs, the assets of which fell by 3.5% in less than three months, to 3334 tons.

Platinum prices may continue to rise this year, as investment demand will pick up amid continued loose monetary policy by leading central banks.

Interest in platinum could fuel its significant potential as a replacement for palladium in next-generation catalysts. Platinum is also a promising element for hydrogen fuel cells, which many experts call the future of transport. Read more about manufacturing challenges.

The main risk for platinum remains the complete refusal of automakers from the production of diesel vehicles since the share of world consumption in this area remains quite high (over 65%). At the same time, the expert clarifies, against the background of the limited availability of rare-earth metals, platinum may receive an auxiliary purpose in microelectronics and other industries, which may push quotes to new heights, up to $ 1.3-1.4 thousand per ounce.
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