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Platinum Group Metals

Lonmin was once valued at billions, take a look at the troubled mine – by Dineo Faku (Independent Online – August 16, 2017)

https://www.iol.co.za/

CAPE TOWN – As South Africa commemorates the fifth anniversary of the Marikana shooting, Lonmin – which saw police gun down 34 mineworkers at a koppie outside the platinum producer’s Marikana Mine – today is a shadow of its former self and the platinum sector decimated. Around 80% of platinum mines in South Africa are under water and earnings negative at current spot prices.

In the past five years 70000 jobs have been lost in the industry as companies grappled to stay afloat, and another 20000 mine workers face the prospects of losing their jobs as AngloGold Ashanti, Bokoni Platinum Mine and Sibanye Gold flagged that they would mothball shafts.

Since 2012 Lonmin once valued in billions, has lost most of its market capitalisation and is now South Africa’s worst performing platinum stock on the JSE. On August 14, 2012, its market cap was £18.32bn (R317.38bn) and yesterday it was only at £307.85 million.

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UPDATE 2-Lonmin to sell surplus platinum capacity to raise cash – by Sanjeeban Sarkar and Barbara Lewis (Reuters Africa – August 7, 2017)

https://af.reuters.com/

Aug 7 (Reuters) – Platinum miner Lonmin Plc said on Monday it would cut costs and sell some assets, including processing capacity of up to 500,000 ounces per year, as it battles to overcome a weak market and to preserve jobs.

Shares in the South African miner rose 1.7 percent by 1020 GMT in response to Monday’s announcement, although some analysts said it would be important to see what terms Lonmin is able to agree with potential buyers. So far this year, its shares have fallen more than 35 percent.

Platinum miners in South Africa face an array of obstacles, including very deep, narrow seams, political instability and a stubbornly low platinum price of around $950 an ounce.

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Best-Performing Metals as Hard to Trade as They Are to Find – by Eddie Van Der Walt (Bloomberg News – July 14, 2017)

https://www.bloomberg.com/

Even if you’d heard of this year’s best-performing metals, betting on them would probably have been a struggle. Ruthenium, iridium and the somewhat better known rhodium — used mostly in specialized products like hard disks, spark plugs and autocatalysts — have trounced almost all major commodities tracked by Bloomberg.

Prices are up at least 33 percent this year as demand improved for raw materials that are among the world’s rarest and collected as byproducts of mining the precious metals platinum and palladium.

Unlike most other commodities, which are bought and sold on exchanges around the world, these metals are quirky assets. There are few exchange-traded funds backed by rhodium and they are small and thinly traded. It’s even harder to buy and sell ruthenium and iridium, where most deals are between suppliers and industrial users.

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Platinum Drop Fires Social Unrest as Villagers Turn on Mines – by Kevin Crowley (Bloomberg News – June 12, 2017)

https://www.bloomberg.com/

More platinum wealth lies beneath South African soil than anywhere else on Earth, and for decades the companies that extracted the precious metal promised to help improve the lives of the impoverished people who live above their mines. Those communities are getting tired of waiting.

Demonstrations by residents around mines — many living in improvised shacks without running water — have disrupted operations run by producers including Impala Platinum Holdings Ltd., Lonmin Plc and African Rainbow Minerals Ltd.

The protesters demanded jobs and money, saying that investments outside of the mines haven’t been enough. Last month, a bus that ferries Lonmin workers was torched, forcing the company to halt operations at two shafts.

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Zinc, tin, nickel, platinum evoke most optimism at Junior Indaba – by Martin Creamer (MiningWeekly.com – June 8, 2017)

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – UK market intelligence firm CRU is most optimistic about the prospects for zinc, tin, nickel and, to a certain extent, platinum over a 12-month time horizon and named copper, bauxite, nickel and gold as good commodities to be in over the longer term.

CRU principal consultant Ben Jones told the Junior Indaba in Johannesburg on Thursday that he expected a divergence across bulk commodities and base metals. Jones formed part of a panel discussion led by Standard Bank mining head Sandra du Toit and participated in by Regarding Capital Management chairperson Piet Viljoen and Standard Bank mining research head Tim Clark.

Clark said heart had to be taken from the mining industry finding the bottom, after a period of cost cutting, and experiencing a rebound and a restart because the waning of supply had brought it into the present healthier state.

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Anglo American’s New Chairman Has a History of Leading Takeovers – by Thomas Biesheuvel (Bloomberg News – June 7, 2017)

https://www.bloomberg.com/

The century-old mining giant Anglo American Plc named Stuart Chambers as its new chairman less than a year after he steered U.K. chipmaker ARM Holdings Plc through a $32 billion takeover.

Chambers, a former chairman at ARM and Rexam Plc, will join Anglo’s board in September and take over the post in November, the company said in a statement Wednesday. The 61-year-old is replacing John Parker, who said he was standing down earlier this year.

The new chairman will join as Anglo seeks to build on a recovery following a raw-materials downturn that hurt most of the mining industry. The company’s shares slumped to a record low in London in early 2016 on concerns about its debt position. Chief Executive Officer Mark Cutifani announced a plan to radically shrink the company through asset sales, but reversed the strategy this year after recovering commodity prices revived profits.

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Miner Lonmin confident it can turn around troubled business – by Zandi Shabalala (Reuters U.K. – May 31, 2017)

http://uk.reuters.com/

LONDON – South Africa-focused platinum producer Lonmin (LMI.L) is pulling every lever to try to restore confidence in its ailing business, including reopening a major shaft and expanding its biggest operation, its chief executive said.

Lonmin, one of the world’s top platinum producers, has been in the doldrums for years due to low prices and soaring costs, leading the company to tap investors for cash three times in the last eight years.

Analysts have said Lonmin will probably come to the market soon for more cash as its liquidity shrank, bringing it closer to breaching debt covenants following a $146 million (£113.26 million) writedown in May. As of end-March, Lonmin had net cash of $75 million, down 34 percent from a year ago.

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Zimbabwe plans $200 million platinum refinery with Australia’s Kelltech (Reuters U.S. – May 17, 2017)

http://www.reuters.com/

Zimbabwe is planning to build a $200 million platinum refinery next year in a joint venture with Australia’s Kelltech Ltd, the Mines Minister said on Wednesday.

The southern African nation holds the world’s largest deposits of platinum after South Africa and has been pushing mining firms operating in the country to build refineries to stop the export of raw platinum ore.

Walter Chidhakwa said the government’s mining arm, Zimbabwe Mining Development Corporation, would own 30 percent of the refinery, privately-owned Kelltech would own 49 percent and the balance would be held by Golden Sparrow, a Zimbabwean firm.

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Platinum output grinds lower, but not fast enough to boost prices – by Jan Harvey and Zandi Shabalala (Reuters U.S. – May 17, 2017)

http://www.reuters.com/

LONDON – South Africa’s platinum output is grinding lower as producers cut capital expenditure and shutter unprofitable areas, but it is not happening fast enough to tackle the industry’s bigger problem – rock-bottom prices for the metal itself.

Platinum prices in dollar terms are up just 4 percent this year in the face of a much bigger rally in other precious metals like palladium and gold, and are 32 percent below their 10-year average of $1,375 an ounce. In rand terms, they have fared even worse this year, pushing into the red as the rand strengthens versus the dollar, eroding what little support the miners had.

That is not making the sector particularly attractive for investors, with the Johannesburg platinum index underperforming the main stock index this year. That reflects the failure of the sector to respond more dramatically to the economic realities of falling prices while also battling a strengthening rand and regulatory uncertainty.

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Bus-Burning Protesters Are Latest Threat to Lonmin Comeback – by Kevin Crowley (Bloomberg News – May 12, 2017)

https://www.bloomberg.com/

Just as Lonmin Plc Chief Executive Ben Magara puts out one fire, another one lights up. After Lonmin spent 70 percent of its cash in the last three months of 2016 following a labor dispute at the platinum miner’s biggest shaft, Magara, 49, donned a hard hat and mining overalls to meet workers every day in February to ease tensions. The efforts proved successful and he reported in March that production was back on track.

But the relief was shortlived. Violent community protests around the company’s Marikana operations forced it to temporarily close two smaller shafts last week, amid concerns for workers’ safety. A bus was later set on fire.

The protests are just the latest in a litany of social and labor disputes threatening to overshadow Magara’s turnaround efforts when Lonmin publishes half-year results on Monday. The South African platinum producer, which last reported an annual profit in 2013 and has seen its share price decline about 97 percent since then, is under growing pressure to prove it can make money.

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Sibanye Gold expands platinum holdings with US acquisition – by Matt Volz (Washington Post – May 4, 2017)

https://www.washingtonpost.com/

Associated Press – HELENA, Mont. — A South African gold mining company completed a $2.2 billion purchase of the only U.S. producer of platinum and palladium on Thursday, its third such acquisition in the past year as the company looks to expand its precious metals holdings.

Sibanye Gold Limited’s merger with Littleton, Colorado-based Stillwater Mining Co. on Thursday positions it as the world’s fourth-largest producer of precious metals that include platinum, palladium, rhodium and gold.

The value of platinum and palladium, which are used in vehicles’ catalytic converters and in jewelry, has plunged since a high in 2008. However, Sibanye officials said in documents filed with the Securities and Exchange Commission that they are optimistic about the future of the market, due to the expected growth in worldwide vehicle sales in coming years.

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Mining’s Biggest Loser Lonmin Is Burning Cash to Stay Alive – by Kevin Crowley (Bloomberg News – March 16, 2017)

https://www.bloomberg.com/

For most of the mining industry, 2017 is turning out to be another good year. The big exception is Lonmin Plc.

Investors are losing confidence in the world’s third-largest platinum producer as it burns through cash to stay afloat, just 15 months after raising about $400 million from shareholders. Platinum prices aren’t far from a seven-year low and Lonmin has its own set of operational problems, including higher costs and lower output at its biggest mining shaft.

The stock is down more than 30 percent in 2017, the most in the FTSE All-Share Basic Materials Index of 28 commodity producers. The overall index has gained 11 percent this year.

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Toyota’s new technology a blow for platinum, palladium price – by Frik Els (Mining.com – February 22, 2017)

http://www.mining.com/

Toyota sold more than 10 million vehicles last year placing it in a virtual tie with Volkswagen as the world’s number one automaker. Stricter pollution regulations around the world and intense competition mean that top priority for traditional car companies is to cut costs and reduce emissions.

A new technology unveiled by Toyota on Wednesday is win for the Japanese company on both counts. Toyota announced the availability of a new, smaller catalyst that uses 20% less precious metal in approximately 20% less volume, while maintaining the same exhaust gas purification performance.

Toyota’s “world’s first integrally-molded Flow Adjustable Design Cell (FLAD)” is not the first time researchers have found innovative ways to reduce pricey platinum group metals in exhaust systems. But those technologies seldom make it all the way to the assembly line.

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Judge overturns halt in Ivanhoe grave relocations in South Africa – by Geoffrey York (Globe and Mail – February 20, 2017)

http://www.theglobeandmail.com/

JOHANNESBURG — A South African judge has overturned a court injunction at a huge Canadian-owned platinum project, saying that any delay to the project would cause “significant prejudice” to the company and the local community.

The judge reversed an earlier court order, issued last November, that had halted the exhuming and relocating of dozens of ancestral graves at the site where Ivanhoe Mines Ltd. is developing a $1.6-billion platinum mine.

Hundreds of community members have been fighting against the mine for years. But the company says the project would provide thousands of direct and indirect jobs, along with education and training opportunities and a local ownership trust.

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China May Be a Hitch in African Miner’s Bid for U.S. Platinum – by David McLaughlin and Kevin Crowley (Bloomberg News – February 9, 2017)

https://www.bloomberg.com/

What’s to keep South Africa’s biggest gold miner from buying a U.S. palladium producer? China, perhaps.

Sibanye Gold Ltd. is seeking regulatory approval for its $2.2 billion takeover of U.S.-based Stillwater Mining Co. Adding Stillwater’s two Montana mines — the only platinum-group operations in the U.S. and the biggest outside South Africa and Russia — would make Sibanye the world’s third-biggest palladium producer.

A Chinese consortium owns about 20 percent of Sibanye, making it the miner’s biggest single shareholder. That may spark concerns at the U.S. body that reviews whether purchases of businesses by foreign buyers could threaten national security. That regulator — the Committee on Foreign Investment in the U.S. — has looked warily on some high-profile investments by Chinese investors.

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