Global platinum production to fall in 2017

By Tichaona Kurewa

HARARE-Platinum producers in Southern Africa face tough times in 2017 as global total platinum production is expected to fall by 4 percent in 2017 owing to a shrink in demand, the World Platinum Investment Council (WPIC) said in its fourth quarter report of 2016.

Zimbabwe and South Africa are home to the world’s largest known platinum reserves with the later leading followed by Russia and then Zimbabwe. Canada and the United States of America complete the world’s top five platinum producers.

Zimplats, Unki and Mimosa, whose production reached 475 koz in 2016, are the three platinum miners in Zimbabwe while Implats is one of the platinum producers in South Africa.

According to WPIC total platinum supply is forecasted to fall by four percent to 7,660 koz in 2017, with both refined production and secondary supply projected to decline.

“Refined production is expected to decrease by 2 percent to 5,920 koz, whilst total mining supply is set to drop by 3 percent to 5,900 koz. All regions are forecast to see reductions in refined output, with the largest falls likely in South Africa and Zimbabwe.

“Supply in South Africa is expected to be 1 percent lower year-on-year owing to the closure of loss-making production and depletion at various operations,” it said.

Secondary supply, WPIC said , is predicted to decline by six percent to 1,760 koz, largely owing to the anticipated 20 percent drop in jewellery recycling to 500 koz (-125 koz), which should outweigh the anticipated 2 percent growth in platinum recovered from autocatalysts (+20 koz).

“Global demand is projected to decrease by 6 percent to 7,780 koz this year (Chart 11), primarily owing to lower forecast investment demand (-255 koz), and lower net requirements for the petroleum sector (-120 koz),”WPIC said.

Despite a projected decline in 2017, during  the fourth quarter 2016  platinum demand increased  by 17 percent year-on-year to 2,160 koz in  the last quarter of 2016 primarily as a result of greater investment in bar and coin purchases.

Platinum and other minerals such gold, diamonds and chrome, copper and coal are Southern Africa’s major foreign currency earners followed by agricultural produce such as tobacco, cotton, beef and sugar.

Platinum is used in many objects and devices including laboratory equipment, electrical contacts, dentistry equipment, computer hard disks, turbine blades and more. Platinum is probably best known for being extensively used in jewellery, but its primary use is in catalytic converters for diesel engines in vehicles which account for around half of its demand.

March 2017
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