  |
|||||||
|
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