now is the time to open smokey hills

Platinum Rises Near Record as Another South African Shaft Shut

By Danielle Rossingh

Oct. 25 (Bloomberg) -- Platinum rose to within 0.7 percent of a record in London as another mine shaft in South Africa, the biggest producer, was shut following a spate of fatal accidents in the country.

Impala Platinum Holdings Ltd., the world's second-biggest producer, said today it doesn't know when it will reopen a shaft at its Marula mine that was closed for investigation after two workers were killed on Oct. 23. The deaths brought the total fatalities at mines run by companies such as Anglo Platinum Ltd. and Northam Platinum Holdings Ltd. to five in just over a week.

``There is a reason why platinum prices are so high,'' said Christoph Eibl, co-founder of Zug, Switzerland-based Tiberius Asset Management, which manages $1.4 billion in commodities. ``We have an unstable situation from the supply side.''

Platinum for immediate delivery gained as much as $9, or 0.6 percent, to $1,450.50 an ounce in London. The metal used in jewelry and car catalysts reached a record $1,460 an ounce on Oct. 19. It traded at $1,448 as of 12:32 p.m. local time. Palladium fell 50 cents, or 0.1 percent, to $360 an ounce.

Production may fall 156,000 ounces short of demand in 2007, after a surplus of 10,000 ounces last year, according to Suki Cooper from Barclays Capital. Supply has lagged behind demand in seven of the past eight years, Johnson Matthey Plc says.

Anglo Platinum, the world's largest producer, lost 1,300 ounces of the metal a day after the government ordered three shafts at its biggest mine, Rustenburg Section, shut on Oct. 18.

Lost Output

Northam, which operates the deepest platinum mine in the world, lost a total of 6,500 ounces of platinum-group metals and gold at its only mine, which closed on Oct. 16.

Anglo Platinum, Northam Platinum, and DRDGold Ltd. yesterday reopened the closed shafts.

Impala's Marula mine produced 65,200 ounces of platinum in the year ended Sept. 30. The closed shaft accounts for about half of production at the mine, Bob Gilmour, a spokesman for the company, said in an interview from Johannesburg today.

Lonmin Plc, the world's third-biggest platinum producer, said its fiscal fourth-quarter output of the precious metal fell 19 percent because of strikes at its Marikana and Pandora mines.

Output of ``saleable'' platinum in concentrate, a raw material used by smelters, dropped to 207,513 ounces in the three months ended Sept. 30, from 256,091 ounces a year earlier, the London-based company said today in a statement distributed by the Regulatory News Service.

The series of mining accidents has prompted the National Union of Mineworkers, South Africa's biggest labor union, to plan its first ever nationwide strike over safety. South African President Thabo Mbeki ordered an audit of the country's mines after 3,200 workers were trapped underground at Harmony Gold Mining Co.'s Elandsrand mine for more than 24 hours on Oct. 4.

To contact the reporters on this story: Danielle Rossingh in London at [email protected]

Last Updated: October 25, 2007 07:44 EDT

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