NKP 0.00% 9.9¢ nkwe platinum limited

some old, some new.... but v. interesting.....

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    South Africa, Biggest Platinum Producer, Posts 19% Output Drop
    By Carli Lourens

    Dec. 10 (Bloomberg) -- South Africa, the worlds largest producer of platinum, posted a 19 percent decline in October output of the metal and related ones including palladium and rhodium after lower prices forced producers to shut mines.

    The value of platinum group metal sales fell 22 percent to 6.3 billion rand ($834 million) in September from a year earlier, Statistics South Africa said on its Web site today. Sales data lags production by a month.

    Anglo Platinum Ltd. and Lonmin Plc cut more than 16,000 jobs as they shut unprofitable mines amid falling demand for platinum, used to make vehicle emission-reduction devices and jewelry. Platinum prices dropped two-thirds from a record last year as the global economy slipped into recession, slashing vehicle sales.

    South African gold production fell 5.8 percent in October from a year earlier, Statistics South Africa also said. The country was the fourth-biggest gold producer in the first half of the year, according to Surbiton Associates Pty.

    Local diamond production slumped 43 percent, after De Beers, the worlds biggest producer of the gems, idled mines on lower demand. South Africas total mine production declined 5.8 percent.

    To contact the reporters on this story: Carli Lourens in Johannesburg at [email protected]

    Last Updated: December 10, 2009 04:17 EST

    Interesting also about Lonmin (Xstata ~ 25% shareholder), once the target of Xstrata - total refined production for 2009 was only 657,317 ounces of Platinum and 1,244,709 of total PGMs, down 6% and 7% respectively from the same period in 2008.

    Noting that sales were higher at 682,955 ounces of Platinum and 1,268,918 of total PGMs respectively.

    Lonmin at a Glance
    Worlds 3rd largest primary producer of Platinum and
    Platinum Group Metals (PGMs) and one of only three such
    mine-to-market PGM producers
    Marikana key operating asset with 12 shafts and inclines, supported by concentrating, smelting and refining capability
    Total attributable resources of 178 million PGM ounces,
    including total attributable reserves of 45 million PGM ounces.

    More importantly, "The cost per PGM ounce produced by Marikana operations for the year to 30 September 2009 at
    R6,590 was 7.4% higher than 2008."

    Marikana is Lonmin's flagship operation yet opex (not sure what components Lonmin use in the calc.) was R6590 or USD 895 (remembering that the exchange rate movement can change this number significantly).

    In contrast, NKP are suggesting around USD 500/oz opex from memory based on their margin at their 950 basket price?

    From Xstrata's perspective which would you prefer?

    Also from the Lonmin Annual Report 2009:

    "The possibility of a positive surprise in the PGM

    The Rand PGM basket price throughout 2009 continued to squeeze industry profitability and cash flow, restricting capital investment. If this continues, further short term under-investment will be the natural consequence. We therefore anticipate that supply will struggle to keep up with recovering demand from 2010 onwards and, as demand returns, there should be a recovery in PGM profit margins.

    Short to medium term outlook for Platinum demand

    Looking at Platinum specifically over the next few years, we expect demand to improve gradually in 2010. This will be supported by a steady recovery in the automotive and industrial sectors with the market being in balance for the year. The behaviour of investors in the Exchange-Traded Funds will continue to influence short term price movements.

    In early to mid 2011, we expect to see the start of a more significant upturn in demand, supported by increasing momentum in the automotive and industrial sectors followed by a more pronounced market rebound, with the market moving back into deficit.

    Long term outlook for Platinum and PGM demand
    In the longer term, the future of PGM market fundamentals remains strong, primarily as a result of the unique characteristics of PGMs and their applications in autocatalysts. This is underpinned by the various emissions legislation being introduced in the coming years to combat global climate change.

    In addition, PGMs are expected to be critical in the
    application of fuel cell technology, which continues to advance in a number of sectors, including a growing number of commercial applications for stationary fuel cells. The Platinum market, in particular, is also expected to be supported by continuing demand from the Asian jewellery market.

    As a result of these factors, we firmly believe that the
    Platinum and other Platinum group metal markets continue to be structurally compelling over time."
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