NKP 0.00% 9.9¢ nkwe platinum limited

compounding effects.. nkp $11 plus

  1. 19 Posts.
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    The article below my dribble is from the AGE.com.au- Business section 25 th Dec.

    IMHO- This is where the biggest real growth market for platinum market is (China) and why Xstrata or another big player will go to bed with Nkwe..( I personnaly don't believe Xstrata will walk from this one)
    Do your own research and check the trends for Platinum prices vs car sales and you will find the trend for price is directly related to sales of vechiles.
    Over the longer term time jewllery will also come into play... compounding effect

    IMO Nkwe has a significant current resource and with their current lease demographics I believe over time will prove over 140 mill ounces.

    If/when Xstrata exercise their option I believe you will see rapid movement towards production.. and construction and commissioning of platinum mines are in the region of 8-10 months in Sth Africa..( once engineering / material issues are sorted )
    Xstrata are a hard task master and run a lean operation and a new mine will no doubt have a lot of lessons learnt from other operations and will utilise latest technoligies where possible and the operation will be streamlined for maximum efficiency. (unlike a lot of existing older operations which continue to have operational issues/downtime)

    I look at NKWE and see a South African political statement in play.. they have the right players on board / the political connections are right ... and why not when you are potentially looking at a 100 plus year mine life..lots of employment/ training / upskilling/ revenue..
    Excellent PR for the government ( and NKP ) when this kicks in.. compounding effect

    Assuming Xstrata exercise their option and free carry nkp as per agreement-which is worth a lot of money to Nkp ( no interest ) along with what I believe will be a long term basket price significantly higher than the current $1470ish price due to improved world economic fundamentals and continued growth/demand mainly in China for car sales but also India...compounding effect

    Remember the days when just a few people used to walk around with a brick in their hand ( the first mobile phones ) and now everybody has one that slips into the top pocket. ... same same in emerging economies with cars .. once people see their neighbours neighbour with one and how beneficial they can be they want/need/ justify one for themselves and will work that bit harder to get one. .. compounding effect

    Nkwe is just getting noticed in Nth America and Europe.. where the real long term investment $ are. They are only just starting to buy.. if/when Xstrata pickup their option- watch the long term investment houses try to clamour in to the 100 year plus mine life and massive returns to be of a company called NKWE.

    There will no doubt be hurdles to cross and holdups that occur due to unforseen circumstances etc.. but thats business..

    - I see the nkp share price above $11 within 3 years

    I'm sure I will get some comments re above.. please don't expect a reply .. I'm going to the beach and not coming back till next year.

    Cheers and all the best to all for 2010.

    Auto sales on the rise in ChinaDecember 25, 2009 - 7:04AM

    Minivan salesman Zhu Yi has a problem that most auto dealers elsewhere would happily swap for their own - he doesn't have enough vehicles to satisfy customer demand.

    "Sales are exploding," says Zhu, a 32-year-old manager at a General Motors Co joint venture dealership in Chengdu, pointing to charts on his laptop that vividly plot the steep incline.

    Car buyers in Chengdu, a grimy city in southwestern China's Sichuan province best known for its giant pandas and spicy food, face waits of up to several weeks for some popular models, he says.

    "We simply don't have the cars people want. Sales could be climbing even faster."

    As growing numbers of Chinese shop for their first vehicles, or trade up for newer models, sales in China's immense hinterland are booming, encouraged by tax cuts, government subsidies and growing consumer spending power.

    In regions striving to catch up with relatively well-off coastal cities, families and small businesses are gladly swapping scooters and bicycles for the comfort and convenience of the automobile.

    The supercharged growth has propelled China ahead of the United States as the world's biggest auto market and provided a lifeline for automakers like General Motors and Toyota Motor Corp as sales crashed in other markets.

    The government's role in spurring the market has been crucial but China's still low level of car ownership points to the potential for decades of strong growth even as some analysts warn the future holds tougher competition and dwindling profits.

    To counter a slowdown late last year as the global financial crisis unfolded, the government halved taxes on purchases of small autos and is spending 5 billion yuan ($A830.21 million) on subsidies for purchases of light trucks and minivans in the countryside, where most of China's 1.3 billion people live.

    Earlier this month, the purchase tax was raised to 7.5 per cent, though subsidies also increased.

    Happy with the results from this year's rescue package for the industry, Beijing is leery of risking a relapse, analysts say.

    "The message sent by the government is that they will not let the auto industry weaken, especially not in 2010," said Jia Xinguang, chief analyst at China National Automotive Industry Consulting & Developing Corp, an investment management company.

    Enticed by the potentially huge market, automakers have poured billions of dollars into ventures here in the past two decades. Total sales this year forecast to shoot past 13 million units, up a third from last year's 9.8 million.

    Meanwhile, sales in the US have faltered, with January-October vehicle sales totalling 8.6 million, compared with Autodata CorpChina's figure for 10.9 million in China during the same period.

    The revival in sales has been opportune for GM as it struggles to restructure following a spell in bankruptcy court. Including minivans and other passenger cars, SAIC-GM-Wuling, GM's mini vehicle venture in China, led nationwide sales in November, with 83,753 units sold.

    Car sales in the main cities like Beijing and Shanghai are robust, but the zippiest growth has been in so-called second, third and fourth-tier cities. Chengdu, a city of 11 million, now ranks in the top four auto markets, with sales jumping almost 60 per cent over a year earlier in September, to 22,585 units.

    The major city nearest the epicentre of a catastrophic May 2008 earthquake that left almost 90,000 people killed or missing, Chengdu did not suffer extensive damage, but it is now booming as money floods in to finance rebuilding in the quake zone.

    Along the main roads ringing the city and to the airport stand cluster after cluster of newly built auto dealerships - luxury brands like Jaguar, Porsche and Rolls Royce as well as more affordable foreign and domestic brands.

    Zhu's dealership, which sells mainly SAIC-GM-Wuling compact minivans, has seen sales more than double to 37,000 units so far this year, he says.

    The vans, which seat seven and go for 30,000 yuan-50,000 yuan ($A5,003-$A8,302), are the country's biggest selling model, favoured mainly by small, private businessmen like Wu Weizhong, a glove seller who was peering under the driver's seat, where the vehicle's engine is located.

    "That's the heart of the vehicle, the most important part!" Wu said before jumping inside to try out the seat and steering.

    Chengdu's dusty, smog-choked roads are jammed with a smorgasbord of brand names - big Toyota and Lexus SUVs, sleek Mercedes Benz, Buick sedans and smaller, compact Suzukis and Peugeots. Along with the foreign brands are plenty of Changans, Cherys and BYDs - fast-growing domestic automakers that are grabbing market share by catering to customers seeking affordable, fuel efficient cars.

    The proliferation in choice has made buyers more discerning.

    "Before, it was a seller's market, and people would just buy whatever was available, but now they have all sorts of requirements," says veteran saleswoman Chen Lin, who moved to BYD, a battery maker that branched into automaking this decade, looking for new opportunities.

    BYD's F3 compact is currently the country's bestselling sedan, and nine out of 10 of Chen's customers are first-time car buyers, though growing numbers of visitors to her brightly-lit dealership on the outskirts of town are looking to trade up to the automaker's F6 midsize sedan, she says.

    "People in Sichuan are very practical. They are focused on value for money, not prestige. So our cars seem to suit the local market," Chen said.

    Some, however, doubt the good times will last.

    Already, overall vehicle production this year has outstripped sales, as of the end of November, suggesting that inventories may rise as output catches up to demand, which could cut into profits.

    And as the market matures, automakers here, like their counterparts in the US and Europe, will face the same problems they've struggled with in the past: too much production capacity and pressure to lower prices.

    Strong sales help, but they are no guarantee of long-term profitability, said Zhang Xin, an analyst at Guotai Junan Securities in Beijing.

    "How much can they earn if they're squeezing their profits to get better sales figures?" Zhang said.

    But with car ownership at only 40 per 1,000 people, and even less in the countryside - a tenth that of the US - dealers like Zhu and Chen have few qualms about the industry's future.

    "Customers are buying because, quite simply, they need a car, their incomes are rising, and they now have the kind of purchasing power they need to buy them," Zhu says.

    2009 AP

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