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CAPE TOWN (miningweekly.com) –Tighter vehicle emission legislation in South Africa would boost the struggling platinum mining industry and be a fantastic local beneficiation route for the metal, which is facing an uphill battle, SFA Oxford MD Beresford Clarke said on Monday.
Beresford, who was addressing the Investing In African Mining Indaba on Monday, said that South Africa was becoming less competitive in the platinum market and the next three years would be tough for platinum.
The recycling of platinum autocatalysts and platinum jewellery had risen to two-million ounces a year, four times higher than in 2000, and was tantamount to Lonmin-sized output being incrementally added every five years.
Palladium-rich Russian and North America were outdoing platinum-and-rhodium dominant South Africa, with both countries producing at lower cash costs and higher by-product credits than South Africa.
Cheaper palladium was taking over some traditional platinum market strongholds, with platinum losing 620 000 oz of demand to palladium in formerly platinum-dominant diesel autocatalysis.
Rhodium’s intensity of use had collapsed, closing some upper group two (UG2) mines.
Even after rhodium loadings had been thrifted, the market was cautious to return to rhodium because of security of supply issues related to the ongoing labour strikes.
With the current low average platinum grade of 3.44 g/t mainly as a result of the overwhelming emergence of narrow-reef UG2 mining, companies were paying for a whole lot more waste for every ounce mined.
This was being compounded by safety regulations in the last two years demanding increased mining widths and leading to more dilution.
While the cherry on the top of declining Merensky reef had always been the addition of nickel and copper by-product credits, strongly emerging UG2 reef was platinum and rhodium dependent.
The cost of production in South Africa had risen exponentially in recent years, with cash costs trebling since 2003 against a doubling in Zimbabwe and a rising of only 1.4 to 1.5 times in North America and Russia.
While the average shaft depth in South Africa was more than 1 000 m, in Zimbabwe it was still only 230 m.
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