Gold Miner Bets on Platinum’s Comeback – by Alexandra Wexler (Wall Street Journal – February 25, 2016)

South Africa’s Sibanye is buying platinum deposits on the cheap, trying to replicate a strategy that paid off with gold

JOHANNESBURG— Sibanye Gold Ltd. is buying many of South Africa’s aging platinum deposits on the cheap, betting it can replicate a strategy that helped turn a handful of struggling old mines into one of the world’s top gold producers.

Platinum prices recently trawled near seven-year lows, making Sibanye’s pivot from gold to the white metal counterintuitive for an industry in the teeth of a jarring metamorphosis. If it succeeds, it could set a precedent for other miners to diversify beyond their core commodities at a time when assets can be snapped up for a pittance.

“The mining of platinum is not too different to gold,” said Neal Froneman, the South African company’s chief executive. “Of course it can go lower and it has gone lower since we made our move, but we do not believe that these low prices will continue.”

Platinum, which until about five years ago used to be more expensive than gold, was trading around $927 an ounce, down 21% over the past year.

Executives attending an annual mining conference in Cape Town earlier this month expressed optimism for gold prices this year, as the safe-haven investment climbed back to $1,238.80 an ounce, up 2.4% over the past 12 months. Positivity on platinum prices was in shorter supply.

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