Chromium/Platinum Group Metals – Page 30

3 Reasons Why Palladium Prices Should Continue To Surge – by Royston Wild (Forbes Magazine – April 15, 2014)

April 16, 2014

http://www.forbes.com/

A confluence of factors have propelled palladium to multi-year peaks in the past few days. Recent highs above $800 per ounce representing the highest level since March 2011, and for some a march towards 2001′s all-time high of $1,090 is considered a very real possibility.

I am amongst those who reckon that palladium is poised to enjoy further solid price appreciation, and here I outline the three major factors which should continue to drive the metal skywards.

Russian shipments on the wane

The escalating political crisis in Ukraine has been a significant driver of palladium’s ascent in recent weeks, with Russia’s alleged involvement in the conflict prompting the US and the European Union to discuss imposing heavy economic sanctions on the country.

Norilsk Nickel is the world’s largest producer of the precious metal, and last year the company produced 2.58 million ounces of the material, or about 40% of total global supply. So the possibility of trade restrictions being placed on Russia could be catastrophic for metal supplies.

Palladium at Highest Since 2011 on Ukraine as Gold Gains – by Nicholas Larkin and Glenys Sim (Bloomberg News – April 14, 2014)

April 14, 2014

http://www.bloomberg.com/

Palladium rose to the highest price since 2011 in New York on concern supply may be restricted as tension escalated over Ukraine. Gold reached a three-week high.

Russia and the U.S. traded barbs at an emergency meeting of the United Nations Security Council as a deadline passed for pro-Russian separatists to leave buildings they occupied amid escalating violence in eastern Ukraine. The U.S. and European Union have vowed to impose tougher sanctions on Russia if President Vladimir Putin’s government makes another move threatening Ukraine’s sovereignty.

Palladium advanced 13 percent this year as the threat of disruption to Russian exports compounded concerns about supply spurred by a miners’ strike in South Africa that started in January. The nations are the world’s biggest producers. Gold futures climbed 1.2 percent last week as a weaker U.S. dollar and falling equities increased demand for a haven.

“It’s a double-edged sword for palladium, we’re seeing robust demand and also supply constraints,” James Moore, an analyst at FastMarkets Ltd. in London, said today by phone. “You’ve got the South African strikes and concern regarding Russian sanctions as tension bubbles along. Investment demand is strong.”

Platinum strike could be godsend for South African pgm miners – by Lawrence Williams (Mineweb.com – April 11, 2014)

April 11, 2014

http://www.mineweb.com/

South Africa’s platinum strike could be a blessing in disguise for mining companies making the case for closures of unprofitable operations.

LONDON (MINEWEB) – One doesn’t have to be too much of a cynic to feel that the 11 week platinum miners strike primarily affecting the underground mines around Rustenburg may prove to be be a long term positive game changer for the main platinum mining companies – and Anglo American Platinum (Amplats) in particular. The world’s largest platinum miner was already struggling with the profitability of its highly labour intensive Rustenburg area platinum mines and had already proposed a mine and shaft closure programme to try and rationalise its operations and bring them into decent profitability.

Indeed its proposals of a little over a year ago involved the potential rationalisation of its Rustenburg operations into three mines – Thembelani, Siphumelele and Bathopele which between them have five shaft systems primarily working the narrow highish grade Merensky reef systems.

This would mean putting two more mines – Khuseleka and Khomanani – with four shaft systems, on long term care and maintenance with the possible loss of up to 14,000 jobs, although the company said it would have hoped to replace most of these over time with initiatives to generate new non-mining business opportunities in the area.

Pouroulis family launch third pass at platinum – by David McKay (Miningmx.com – April 10, 2014)

April 10, 2014

http://www.miningmx.com/

[miningmx.com] – THARISA Minerals is the latest company to roll off the conveyor belt of the Pouroulis family, led by patriarch, Loucas Pouroulis.

A Cypriot by birth, Pouroulis came to South Africa after having been trained in metallurgy at the University of Athens. Mining was in his blood: his father was a copper miner in Cyrpus; the Pouroulis family lived near one of the mine’s slag dumps.

There is now, however, a third generation of Pouroulis’s plying their trade in the sector. Loucas’s eldest son, Adonis, is the chairman of the UK-listed Petra Diamonds whilst his brother, Phoevos, heads Tharisa, which is platinum/chrome miner. In truth, the Pouroulis family has an abiding obsession with mining platinum.

Loucas Pouroulis’ first encounter with platinum – Lefkochrysos – was unkindly referred to as Lefko-‘crisis’ following a decline it the platinum price around 1987 which left the elder Pouroulis’ plans in tatters. He went on to run Consolidated Modderfontein, a gold mine, before exorcising the ghost of Lekkochrysos after founding the breathtakingly successful, Eland Platinum.

South Africa more competitive than China in ferrochrome: IFL – by Emma Farge (Reuters India – April 9, 2014)

April 9, 2014

http://in.reuters.com/

DAKAR – (Reuters) – South Africa should be able to snatch back the top spot in global ferrochrome production from China within five years thanks to cost-cutting, says one of Africa’s biggest producers, International Ferro Metals.

South Africa’s share of world production of the steel feedstock has slumped since 2012 when it fell by 15 percent to 32 percent of the 4.8 million metric tons (5.2911 million tons) produced globally, relegating it to second place behind China.

“South Africa will regain its leading position as top ferrochrome producer in the world. A number of us have reduced our costs so we can place alloy into China cheaper than the Chinese can produce,” said Chris Jordaan, Chief Executive of South Africa-based International Ferro Metals (IFL) (IFL.L).

That could be possible within five years, he said in a telephone interview during the Reuters Africa Summit. “It suddenly makes it much better to smelt material as close to the ore as you can.” A weak South African rand was also helping the country regain competitiveness, he said.

ANALYSIS-South Africa’s platinum strike will hasten restructuring – by Ed Stoddard and Jan Harvey (Reuters Africa – April 8, 2014)

April 8, 2014

http://af.reuters.com/

JOHANNESBURG/LONDON, April 8 (Reuters) – As a strike by South African platinum miners enters its eleventh week, the likelihood that employers will bow to demands for better pay is receding and a drastic overhaul of the loss-making industry is looking more inevitable.

Faced with the tough bargaining stance of the Association of Mineworkers and Construction Union (AMCU), the companies appear increasingly likely to close or sell mines that are bleeding cash while they lie idle.

Before the strike began, around half of the country’s platinum shafts were losing money because of rising energy and labour costs and waning demand for the metal, used mainly in jewellery and in catalytic converters for cars.

To pacify AMCU, Anglo American Platinum, Impala Platinum and Lonmin would have to double entry-level pay over the next three years to 12,500 rand ($1,200) a month – a demand they flatly refuse. The industry has idled some production to shore up margins, but held back from tougher cuts for fear of a political backlash that could compromise its wider interests.

But the miners’ strike, the longest and most damaging in South Africa in decades, has now cost the industry over $1 billion in lost revenue and there is a growing sense that the companies have little to lose.

Ghost towns haunt S.Africa’s strike-hit platinum belt – by Zandi Shabalala and John Mkhize (Reuters India – April 4, 2014)

April 4, 2014

http://in.reuters.com/

MARIKANA, South Africa, April 4 (Reuters) – Shad Mohammed’s electronics and household store in South Africa’s platinum belt has survived a series of mining strikes over the 14 years it has been serving customers in the dusty town of Marikana.

Yet with the latest stoppage now in its 10th week, he has sold just 10 phones instead of well over 100, and has had to branch out into deliveries to avoid giving up and going home to Pakistan, another statistic in a devastating industrial dispute. “Our business is totally dependent on the mine workers,” Mohammed, 38, said among shelves filled with cell phones, laptops and large pots. “If they don’t work we really suffer.”

Members of the Association of Mineworkers and Construction Union (AMCU) have downed tools at Lonmin, the main employer in the tough town of Marikana, and rivals Anglo American Platinum and Impala Platinum in a strike over wages, hitting 40 percent of global production.

The stoppage shows no sides of ending with the two sides still poles apart. AMCU wants a basic-entry level wage in three years of 12,500 rand ($1,200) a month, or annual hikes of around 30 percent, while the companies have offered increases of up to 9 percent and say they can afford no more.

Ring of Fire: Rail, natural gas power KWG plan – by Carol Mulligan (Sudbury Star – April 4, 2014)

April 4, 2014

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Maurice Lavigne’s obligation, as a mine developer, is to optimize economic stability. And that’s what the vice-president of exploration and development with KWG Resources Inc. says his company will do with its plans to build a railroad and process chromite ore with natural gas from its holdings in the Ring of Fire.

You have to keep your costs low with any project, let alone a project on this scale, Lavigne said in Sudbury on Thursday. A “railroad drives down your cost, the gas drives down your costs,” Lavigne told reporters after speaking to a noon crowd at a luncheon held by the Greater Sudbury Chamber of Commerce.

“We’re going to make this project economically robust and we owe that to society.” Lavigne said KWG doesn’t want to build a fragile industry that “shuts down one year and opens the next year and creates chaos in the communities.

“You’ve seen that, you know that movie, we don’t want to do that,” he said. Nor does his company want to go to government and taxpayers looking for subsidies to electricity rates, he said. Lavigne said he came to Sudbury, at the invitation of the chamber, knowing he was coming to “Cliffs-friendly territory.”

South Africa’s PIC Says Platinum Producers Should Control Prices – by Franz Wild and Janice Kew (Bloomberg News – April 3, 2014)

April 4, 2014

http://www.bloomberg.com/

South African platinum producers, which account for almost three quarters of world supply, should consider controlling output to improve prices, said the head of Africa’s biggest fund manager.

Anglo American Platinum Ltd. (AMS), known as Amplats, Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI), the world’s largest producers of the metal, need prices to climb to offset rising costs in an industry already beset by a “concerning” 11-week wage strike, said Elias Masilela, 49, the chief executive officer of the Pretoria-based Public Investment Corp., which manages 1.6 trillion rand ($150 billion) of South African government workers’ pensions.

“They may, as an industry, want to think about supply-demand conditions globally to influence the price,” Masilela, 49, said in an April 1 interview in Johannesburg. “South Africa is a major supplier of platinum, but remains a price-taker. There must be a way of balancing that out given it’s size.”

Masilela’s comments echo those by the governments of South Africa and Russia, which together hold about 80 percent of platinum group metal reserves. The countries plan to set up a production bloc resembling the Organization of Petroleum Exporting Countries, a cartel of the biggest oil-producing countries, they said in March last year.

NEWS RELEASE: KWG Testing Indicates New Ferrochrome Refining Method

April 3, 2014

Toronto, Canada, April 2, 2014 – KWG Resources Inc. (TSX-V: KWG) (“KWG”) is pleased to report that further laboratory tests on the reduction of the Black Horse chromite using natural gas have been completed. The results of these tests provide substantial encouragement that the newly developed method may be utilized to convert the Black Horse chromite into a metallised chrome and iron alloy. During these tests by XPS Consulting & Testwork Services – a Glencore Company, this chromite, blended with suitable solid carbon as reductant, was reduced in the solid state at atmospheric pressure in the presence of reformed natural gas to produce the alloy.

Reactions commenced at 900°C when a suitable accelerant was used to enhance the reactions – substantially lower than is usual for chromite ores. In addition, the time required for the reductants to convert the oxide ore to alloy was substantially less than one hour – much faster than established direct reduction methods have produced.

Based on these tests only, preliminary estimates provided in a report indicate that very substantial energy savings result. The study suggests that overall direct energy costs to process one tonne of concentrate into metallized ferrochrome alloy are less than half those required for conventional technology. In addition, the process has a considerably lower greenhouse gas emission footprint and greatly reduced impact on the environment. Capital costs are estimated to be significantly lower than those for conventional processes utilizing electrical energy. As previously reported, an international patent of the method is being pursued.

About KWG: KWG has a 30% interest in the Big Daddy chromite deposit and the right to earn 80% of the Black Horse chromite occurrence where resources are being defined.

South African mining: Stuck in the past (Financial Times – April 1, 2014)

April 2, 2014

http://www.ft.com/home/us

Critics warn that the migrant labour system threatens the stability of important gold and platinum producers

Mcingelwa Maqotyna still remembers the humiliation that came with applying for the job: being forced to strip naked in a room full of other men, then stepping on to scales to be weighed.

Once he had landed the job, he travelled hundreds of miles from his village to a mine, where he had to get used to plunging deep beneath the surface of the earth at lightning speeds. Seeing the cage-like lift for the first time, he fearfully wondered if its exposed cables would hold.

For Nicolson Mkananda it was the contrast between the tranquil rural environment in which he had grown up and the hustle and bustle of life at a mine that struck him: the individualism, the strange languages and the strict control and discipline imposed on workers. “It was very, very frightening to go there,” he says.

These men, who left their remote villages near Lusikisiki in South Africa’s Eastern Cape in the 1960s and 70s, were part of a vast pipeline of cheap labour that allowed the country’s gold and platinum sectors to flourish. This system of migrant labour was developed during colonialism and extended under apartheid, becoming a pillar of the economy.

Why are platinum and palladium not meeting analyst expectations? – by Lawrence Williams (Mineweb.com – April 1, 2014)

April 1, 2014

http://www.mineweb.com/

The impact of the 10 week old strike which has halted production at a number of South Africa’s platinum mines so far seems to have had little impact on pgm prices. Why?

LONDON (MINEWEB) – While every now and again some analyst or other comments that perhaps palladium is outperforming gold, or platinum is, on the year to date both the pgms have moved up pretty well pari passu with gold overall. All three metals are around 7-8% up since the beginning of the year. Indeed gold moved up substantially further during the height of the Ukraine crisis and while the pgms followed they did not quite do so to the same extent. As gold has fallen back though, the pgms have caught up again.

Many analysts have been preaching the investment merits of the pgms in the light of the long running platinum strike in South Africa which has seen a number of mines effectively shut down so far for some ten weeks – with no end in sight to the strikes yet.

The more aggressive AMCU which has become the dominant player among the platinum mine unions, has been demanding an effective doubling of the workers’ wages which the mining companies have concertedly said they cannot afford – and with many of the deep narrow reef platinum producers finding it tough to make any kind of profit even at current platinum prices they do have a point.

Ivanhoe PEA provides glimpse of SA’s potential platinum future – by Jeff Candy (Mineweb.com – March 28, 2014)

March 28, 2014

http://www.mineweb.com/mineweb/

The miner is planning to have an 8 million t/y platinum operation up by 2024, at costs of under $500 an ounce excluding by-product credits.

GRONINGEN (MINEWEB) – Ivanhoe Mines’ preliminary economic assessment of its Platreef PGM project in South Africa is some welcome good news for a sector that has had more than its fair share of bad.

As the world’s three largest platinum miners continue to bleed in the wake of a strike that has cost them and their workers billions of rands, Ivanhoe’s PEA, released yesterday, confirms the size and scope of a project that not only has the benefit of significant base metal credits, but also ore veins that are wide enough to accommodate mechanised mining.

Driving home the difference between Platreef and its deep, thin-veined peers, CEO, Robert Friedland commented, “We’re looking forward to working with all of our stakeholders to advance the Platreef Project to production, to create valued and skilled jobs and to significantly contribute to the socio-economic development of the people of area communities who will have a voice in decision making and a direct share in our success through our responsively structured, broad-based, black economic empowerment partner.”

Fear of deadly reprisal, hunger, in Rustenburg as SA platinum strike marches on – by Ayanda Mdluli (Mineweb.com – March 27, 2014)

March 27, 2014

http://www.mineweb.com/

Mineweb correspondents investigate conditions and perspectives in Rustenburg – the town at the heart of a strike in South Africa’s platinum sector.

RUSTENBURG (MINEWEB) – When workers sell their hard earned possessions to buy food in the platinum belt of Rustenburg for lack of earnings after nine weeks of a brutal strike one can conclude bread-and-butter politics truly have the region in its grip.

Many stores are shuttered, except pawn shops, which are overflowing with household items that have been sold for next to nothing. In Rustenburg homes, cooking pots once filled with solid chicken cuts now swim with chicken heads and feet instead.

“I would love to talk to you about what is going on but the problem is that I am just too hungry and I need to look for something to eat. The problem is here,” says a middle-aged man, pointing to his abdomen.

His point made, the man, who claims to be a worker in the Karee Mine at Lonmin in Marikana, Rustenburg, South Africa, walks slowly away down the dusty street.

South Africa platinum strike causing ‘irreparable’ damage – producers – by Xola Potelwa (Reuters U.K. – March 25, 2014)

March 25, 2014

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – Platinum producers Anglo American Platinum, Impala Platinum and Lonmin said on Tuesday a strike now in its ninth week at their South African mines was causing irreparable damage to the sector and local economy.

Wage talks have broken down between the companies and the striking AMCU union, which is demanding a doubling of basic wages, although the world’s top three platinum producers said they were open to talks “within a reasonable settlement zone”.

In a joint statement, the companies said they had lost nearly 10 billion rand ($921 million) in revenues, but also pointed to the cost to communities around the mines in the platinum belt northwest of Johannesburg.

South Africa’s biggest post-apartheid mine strike, which has hit 40 percent of global production of the precious metal, is also seen denting sluggish economic growth and widening the current account deficit as its effects ripple from the platinum communities throughout the wider economy.

“The financial cost … does not tell the full story,” the companies said. “Mines and shafts are becoming unviable; people are hungry; children are not going to school; businesses are closing and crime in the platinum belt is increasing.”