Chromium/Platinum Group Metals

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JOHANNESBURG/LONDON, July 1 (Reuters) – South Africa’s platinum sector is at a crucial juncture as the metal’s price, near six-year lows, maintains a steady decline, with analysts now contemplating a move below $1,000 an ounce.

Platinum has fallen nearly 10 percent so far this year, and at current prices of less than $1,100 an ounce, many shafts in the world’s top producing country are losing money.

“(Platinum is) still firmly in a bear market, with little evidence of a bottom as yet,” independent technical analyst Cliff Green said last week. Its break through recent technical levels is “likely to trigger acceleration closer to $1,000, then $950,” he said.

The outlook could hardly be bleaker for an industry that was hit by a five-month strike last year that resulted in big wage increases it can ill afford in the face of soaring costs.

“Half of the industry, including major producers such as Lonmin, is cash-flow negative and if platinum slides below $1,000/oz nearly two thirds of the industry could be underwater,” said Cape Town-based Investec fund manager Hanré Rossouw.

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JOHANNESBURG, June 23 (Reuters) – South Africa’s ferrochrome industry will be thrown into crisis if cash-strapped power utility Eskom is allowed to hike prices, with mines forced to close and as many as 200,000 jobs at risk, an industry group said on Tuesday.

Eskom, struggling to maintain power supplies and laden with debt, has asked the National Energy Regulator of South Africa to approve a 9.58 percent price increase.

While down from an original request of 12.7 percent, ferrochrome producers say that, on top of increases earlier this year, it would deal a hammer blow to the industry.

“The increase in electricity prices will further increase production costs and lead to the closure of most smelters in South Africa,” Jacobus Zaayman, a representative from the Ferro-Alloy Producers Association of South Africa, told a public hearing held by the regulator to consider tariff hikes.

Zaayman said as many as 200,000 jobs could go. It was not clear how many workers the industry employs.

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http://allafrica.com/

Government has lifted the ban on chrome ore exports and scrapped the 20 percent export tax on the mineral in a move expected to improve viability of miners, create thousands of jobs and improve revenue inflows for the fiscus, a Cabinet minister announced.

The Government also raised royalty fees for chrome ore to 5 percent from 2 percent, Mines and Mining Development Minister Walter Chidhakwa said yesterday. The ban on chrome exports was imposed in April 2011 to encourage beneficiation of the mineral.

“The ban on the export of chrome ore negatively affected all small-scale (artisanal) chrome ore producers, who lost their economic ventures and livelihoods,” said Minister Chidhakwa during a Press conference also attended by his Finance and Economic Development counterpart Patrick Chinamasa.

“In addition, the ban on the export of chrome ore did not create opportunities for smelters to invest in new technology for expanded value addition and beneficiation.

“In addition, in order to assist chrome ore producers to operate viably (and) to allow them to create investment capacity in smelting, Government decided to reduce electricity tariffs from eight cents to 6,7 cents per kilowatt hour for chrome ore producers.

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LONDON, May 29 (Reuters) – Platinum miners betting on fuel cell vehicles to help boost demand for the precious metal and lift moribund prices are in danger of having their hopes dashed, at least in the medium term: electric and hybrid cars are taking a bigger share of the market.

The world’s three largest platinum producers Anglo American Platinum (Amplats), Impala Platinum and Lonmin are all investing in projects related to fuel cell technologies, which generate electricity that can power vehicles by combining hydrogen and oxygen over a platinum catalyst.

But analysts doubt fuel cell vehicles will rival the growth of their electric counterparts, mostly because battery recharging stations are less costly and already more widespread than hydrogen refuelling stations.

“As out of the two new technologies only fuel cells use platinum, I guess the miners think they have no choice,” Macquarie analyst Matthew Turner said. “But people are buying electric cars…and that’s not the case for fuel cells.”

Amplats, which has invested about $35 million in the last five years in companies developing new uses for platinum, mostly through fuel cell technology, is mindful of the stakes.

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http://www.bdlive.co.za/

CHINA’s slowing economy prompted a downward revision to the full-year deficit in the global platinum market by 45,000oz, with the supply side left unchanged as increased supply from SA, the world’s largest source of primary platinum, offset declining output from other producers.

In its latest quarterly report, the World Platinum Council, which was set up by six South African-focused platinum mining firms to give the market regular insights into the platinum market, the full-year deficit for this year was reduced to 190,000oz from 235,000oz the council forecast in March in its fourth quarter report last year.

“The reduction in the demand forecast is primarily due to a downward revision to industrial demand in China based on lower growth forecasts,” the council said on Monday.

Total supply this year is forecast to rise 10% to 7.965-million ounces, with South African production rising 30%, or by 945,000oz, after the five-month strike last year knocked more than 1-million ounces of production out of the global market.

Demand is forecast to rise by 3% to 8.155-million ounces.

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http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Black South African interests are giving South Africa’s once-mighty ferrochrome business the cold shoulder.

The value-adding pursuit, which puts six times more value into chrome and generates three times more jobs than mere raw chrome exportation, was last week ditched by Royal Bafokeng Holdings, the investment arm of the 300-strong Bafokeng community, which has for long been associated with chrome, and earlier by Patrice Motsepe’s African Rainbow Minerals (ARM), which first opted out of ferrochrome in Machadodorp with its Assmang partner and then chose to close the Machadodorp ferroalloys operation altogether and relocate to a new ferroalloys project in Malaysia.

Both steps represent a serious indictment of the government’s beneficiation policy, which is failing when it comes to chrome beneficiation on the scarcity of competitively priced electricity and a lack of incentivisation.

Ironically, China is making use of South Africa’s raw chrome exports to advance to a leadership position in ferrochrome – and is likely to advance further in coming quarters as it lowers power tariffs to stimulate energy-intensive operations and as South Africa enters the more expensive winter tariff electricity period.

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http://www.rdm.co.za/

Has the mining industry finally come to the party by paying sufficient wages to its employees? It looks like it. Last week Gold Fields agreed to raise the average wage of its employees by 10%/year for the next three years, a rate that is almost four hundred basis points higher than last year’s 6.1% consumer price inflation rate.

The wage agreement that the gold company reached with organised labour in SA is a significant development on the path to normalising labour relations in SA.

It is also a clear indicator that important lessons were learnt from the Marikana tragedy almost three years ago, and the enormous value destruction on the platinum belt during the five-month strike last year.

The most important part of the deal is that it was reached without any loss in productivity for the company or income for the workers through strike action.

In some ways the Gold Fields settlement for its 3 500 South Deep — its only asset in SA — employees validates the sacrifices made by workers on the platinum belt in 2014.

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http://www.bdlive.co.za/

FORMER Anglo Platinum CEO Neville Nicolau says he might have been able to save the world’s biggest platinum miner from last year’s crippling five-month strike if he had not been given the cold shoulder by Cynthia Carroll.

At the time of their disagreement, the US-born Carroll was CEO of Anglo American, which owns 78% of Anglo Platinum, and chairwoman of Amplats. Nicolau, who was CEO of Amplats from 2008 to July 2012, said in an interview that he took a “very significant” proposal to the Amplats board about how it could survive falling platinum prices and looming labour strife — but the board was not interested.

“Cynthia Carroll disagreed completely with what I wanted to do with the company,” he says.

Nicolau’s frank admissions mark the first time that the boardroom unhappiness about Carroll’s leadership style has spilt out. Carroll left the group in November 2012, shortly after Nicolau, under intense pressure from shareholders.

“There were certain actions which I needed to take. Amcu [the Association of Mineworkers and Construction Union] was on its way in and there was a better way to manage that. The metal price was on its way down and there was a better way to manage that. There were opportunities to consolidate the platinum sector.”

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