Johannesburg, South Africa — MININGREVIEW.COM — 21 May 2009 – South Africa – the world’s top source of platinum – is expected to experience limited growth in the production of the precious metal this year, compared with an 11% decrease in output during the course of last year
In its ‘Platinum 2009’ report, leading metal refiner Johnson Matthey confirmed that South Africa – which accounts for over three-quarters of global platinum supply – saw output fall by 540 000 ounces to 4.53 million ounces last year. The report added that global supply had dropped for the second successive year to 5.97 million ounces – a level last seen in 2002.
“We currently expect global platinum supplies in 2009 to be marginally higher than in 2008, and there will be some limited growth in South African platinum supplies,” said Johnson Matthey, but it did not give an estimate of the expected increase.
The report cited various reasons for the drop in South African production, among them power supply constraints, flooded mines, industrial unrest, a skills shortage and the temporary closure by the authorities of shafts where fatal accidents had occurred.
“Annual palladium supplies also tumbled 12% to 2.43 million ounces for the same reasons,” said John son Matthey.
“In 2008, the world’s three largest platinum mining firms – top producer Anglo Platinum, second-ranked Impala Platinum, and London-listed Lonmin – all recorded lower output than in 2007,” the report continued.
Reuters reports that with metal prices diving in the second half of last year due to the global economic downturn, planned capital expenditure was cut heavily at most mines in South Africa, but unlike in North America, little current production capacity was closed. Only a limited number of shafts, pits or smaller operations have been affected by the cutbacks so far, but Johnson Matthey warned that growth in future supply would be constrained.
“These cuts will only have a minor impact on supplies during this calendar year, but it will constrain growth in platinum production in the longer term,” the report concluded.