Johannesburg, South Africa — MININGREVIEW.COM — 20 May 2008 – The power crisis in South Africa – the world’s biggest platinum producer – could slash the country’s platinum output by 200 000 ounces this year, and other operational hiccups may cut production further.
South Africa, which accounts for over three-quarters of global platinum supply, saw production in 2007 fall 260 000 ounces to 5.04 million ounces, said Johnson Matthey – a world leader in advanced materials technology – yesterday in its Platinum 2008 report.
The report said the new approach to safety by South Africa’s government – the temporary closure of shafts where fatal accidents occur – and other operational challenges had weighed on production. Global supply had fallen 4.1% to 6.55 million ounces last year, largely due to lower output from South African producers.
Though the power situation has stabilised, with mines receiving 90 to 95% of their normal electricity requirements, state utility Eskom has warned that the country could still face the possibility of further power cuts.
“Assuming that electricity supply can be maintained through the South African winter, and power is available for new and expanding operations, the overall effect on South African PGM production in 2008 is estimated to be a shortfall of under 200 000 ounces of platinum – less than initially feared,” the Johnson Matthey report continued.
It also forecast “a substantial deficit” in the overall world platinum market for 2008.
South Africa’s Anglo Platinum – majority-owned by mining giant Anglo American Plc – has scaled back its output forecast by 150 000 ounces for this year because of the power crisis. The firm accounts for 40 percent of global platinum production.
Second-ranked Impala Platinum – which accounts for nearly 30% of world platinum supply –also forecasts reduced output from its mines and refining operations. Production could also fall from the slow ramp-up of production at the No. 3-ranked Lonmin’s new mechanised shafts, Johnson Matthey said.
The metal refiner said it expected the power crisis to hang over South Africa’s platinum sector until 2012, and that the “power gap” may delay the start of new platinum projects.
Caption, Pic 1: Dusk at Impala Platinum’s Rustenburg operation.