Thursday, October 21, 2010

Smack that Bid: "A century's worth of platinum still to be had in South Africa - Johnson Matthey" (PLTM)

Platinum is down $19.00 at $1664.00.
PLTM is the First Trust platinum ETF.
Here's the six-month chart from Kitco:

Johnson Matthey has reason to prefer lower platinum prices.
Here's MineWeb:
A curious reminder that South Africa can mine platinum for more than a century at a time when prices are picking up and miners are still grappling with a few issues 
London-based Johnson Matthey, a specialty metals and chemicals group, has published a report it commissioned, with the startling conclusion that "platinum group metals are prevalent enough to meet demand for many years to come". The report itself, authored by Grant Cawthorn, a professor in the School of Geosciences, University of the Witwatersrand, Johannesburg, finds that for each one kilometer of depth into the earth in the Bushveld Complex (South Africa), "there is in the order" of 350m ounces of platinum.
Curious as this turn of phrase be, the professor says that "for comparison, annual production of platinum from the Bushveld Complex currently is only" around 5m ounces a year.
The latter notion is far easier to grapple with; Anglo Platinum, the world's biggest miner of platinum group metals (PGMs) in 2009 produced refined metal to the tune of 2.5m ounces of platinum, 1.4m ounces of palladium, 350,000 ounces of rhodium, and 91,000 ounces of gold. The four metals are known as the "4E" elements in PGM ores; there are a good number of others, including osmium and nickel.

The professor remarks that "the remarkably disproportionate concentration of the PGE [platinum, palladium, rhodium, iridium, osmium and ruthenium] in one geographic location, South Africa, is genuine. Even with current mining methods, technology and prices, there are many decades to a century of extractable PGE ore already known in the Bushveld Complex".

As mentioned, Anglo Platinum produced 4.8m ounces of PGMs in 2009, from a base of reserves and resources running into hundreds of millions of ounces of metal still sitting in the ground. The abundance of these metals has been known for decades, if not quite from when PGMs were first officially discovered in 1925.

Based on its latest ore statements, based in turn on rigorous definitions, Anglo Platinum holds 170.5m ounces of PGMs in reserves, the strictest classification of a mining company's unmined mineral inventory. If that were not enough, Anglo Platinum holds a further 632.3m ounces of PGMs in the resources category.
Mined at the rate seen in 2009, Anglo Platinum's in-ground inventory is good for another 167 years. The group has other ground with resources not yet measured to the strict standards applied to those mentioned, but that hardly seems necessary on such an astonishing existing life-of-mine....MORE