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The Most Precious of Metals
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This Platinum
article has been taken from a Resource Opportunities special
report
Click
here to read this special report on Anooraq Resources
The platinum price is rising as
the mining industry scrambles to keep up with growing demand.
Supplies of platinum have fallen short of demand in each of
the past four years. As stocks of the metal dwindle, the price
has risen to a 23 year high and the outlook remains extremely
bullish.
A flat-out effort by the mining
industry to boost platinum production from traditional underground
mines is failing to deliver enough new output to satisfy the
rapidly growing demand for the metal.
Attention is now shifting to a
new resource area that can be mined as large-scale open pit
operations. One mine is operating profitably in that area,
and now two new deposits are headed toward production.
This special issue of Resource
Opportunities is devoted to the platinum group metals and
to a company that has spent years positioning itself to be
an important part of the future of these metals.
Click
here to read the full report on Anooraq Resources
Demand For Platinum Is Rising…
The strength in the platinum price
is not surprising when you consider the astonishing array
of consumer products that rely on this metal for their production.
The list of uses of platinum and the other platinum group
metals continues to grow as more products take advantage of
the unique physical and chemical properties of these metals.
Even as the number of products
that rely on platinum grows, more metal is being used in existing
applications. As a result, demand continues to expand steadily.
Few investors have an appreciation of these metals, yet each
of us comes across the metals in numerous products each and
every day of our lives. The rising commodity price and the
steady growth in demand is generating big profits for the
platinum industry.
The Platinum Market Update in this
issue provides more details, including a special report on
fuel cells, an important emerging use for platinum.
…As The Platinum Industry Struggles
To Keep Up With The Growing Demand
The mining industry is investing
billions of dollars in an effort to supply enough platinum
to match the growth in demand. The sharp run-up in the platinum
price to nearly $700 is concrete evidence that the industry
has not been able to keep pace with the expanding market.
Investors that follow platinum
may find it surprising that a shortfall in supply has arisen,
in view of the large undeveloped resources of the metal. Simply
put, developing new mines based on traditional underground
platinum deposits is difficult, expensive and requires a long
lead time.
Sources Of Platinum Are Limited
Platinum occurs in a very specialized
geological setting with a limited number of occurrences. Platinum
is almost always associated with palladium in metal deposits,
along with small amounts of four other minor platinum group
metals. Although resources of platinum group metals (PGMs)
are large, getting enough metal out of the ground is an on-going
challenge.
Presently, 67% of the platinum
mined in the world comes from the massive Bushveld Igneous
Complex in South Africa. The Bushveld is somewhat like a giant
saucer, 300 kilometers in diameter, with the rim sticking
out of the ground, but the middle portion buried kilometers
beneath the surface.
The Bushveld Complex was derived
from a massive body of metal-rich molten rock that originated
deep in the crust of the earth around two billion years ago.
Known as a layered intrusive complex, the Bushveld is by far
the largest complex of this type in the world, 20 times bigger
than the next largest deposit.
The platinum group metals in the
Bushveld are concentrated into thin layers, referred to as
"reefs", that dip gently toward the center of the
saucer and extend laterally for tens of kilometers. The two
main reefs are less than a meter thick, and grade about 4
to 7 grams per ton of platinum group metals, with platinum
representing half to two-thirds of the total. No other known
complex matches the grade of the Bushveld reefs over any appreciable
distance.
The platinum-bearing reefs have
been mined since 1925. The miners initially started at surface,
but over the past eight decades the mines have followed the
reefs deeper into the earth. At present, some of the mines
operate at depths of 2 kilometers.
The capacity of an underground
mine is constrained by the hoisting capacity of the shaft.
That capacity falls as the ore comes from greater depths.
Developing new deep shafts is expensive and can require years
to complete. Output from underground platinum mines is also
constrained by the narrow width. Having only a meter to work
in, mechanized mining is out of the question, with the result
that the mines are very labor intensive. Increasing the level
of output depends on opening up more and more working faces.
All of the platinum production
companies in South Africa have expensive programs underway
to boost capacity. That country has by far the best geology
for platinum. It is also an attractive place to do business.
Changes in legislation related to the mining industry have
created controversy, but as the new rules are better understood,
the mining industry and investors around the world are beginning
to understand that the changes are generally positive for
the industry. South Africa has a well developed infrastructure
and a long mining history.
However, in spite of enormous expenditures
by the mining industry, the supply of platinum continues to
fall short of demand, as it has for each of the past four
years.
Click
here to read the full report on Anooraq Resources
***
Disclaimer: ..The
information included on this article has been placed there
by Resource Opportunities for information purposes only. Resource
Opportunities has not taken any steps to verify the adequacy,
accuracy or completeness of the information provided. Resource
Opportunities nor any of its respective representatives make
any warranty, expressed or implied, of any kind whatsoever,
and none of these parties shall be liable for any losses,
damages, costs or expenses, of every kind and description,
relating to the adequacy, accuracy or completeness of the
available information or the use of the available information.
Editor may have equity positions in companies referenced in
the Resource Opportunity Newsletter.
© 2003 Resource Opportunities
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