Investors expanded their platinum holdings in funds faster than for any other precious metal this year, in a bet that mining companies digging as deep as 1.4 miles underground will fail to meet record consumption.
Companies are drilling ever-deeper to maintain production, pumping chilled air down mine shafts to cool seams as hot as 160 degrees Fahrenheit.
Record car output means two in every five ounces are now being used to coat auto catalysts and overall demand is expanding 9 percent, almost twice the increase in supply
Michael Widmer, head of metals research at Bank of America Merrill Lynch in London and the most accurate forecaster tracked by Bloomberg over eight quarters. "Platinum is my favorite metal for the second half," he said, forecasting a high of $2,100.
Demand from makers of catalytic converters will reach 3.58 million ounces this year, 64 percent more than in 2009, Barclays estimates. The increase exceeds what mines in Russia and North America, the biggest suppliers after South Africa, can produce in a year.
Investors remain bullish because of the outlook for supply. Production in South Africa, which mines 76 percent of the world's platinum, will reach 4.85 million ounces this year, 8.4 percent less than five years ago, Barclays estimates.
Mining companies worldwide are extracting about 3.83 grams of platinum- group metals from every ton of rock, down from 4.4 grams in 2006
"You're seeing demand recover and you're now seeing demand growth, but what you're not seeing is any growth out of the platinum industry. As you look to the future you can see a significant deficit growing."
In summary, the article paints a rosy picture that the long term outlook for platinum is bullish. Demand is rising whilst there are limitations in the supply of platinum where miners have to dig deeper and in general are experiencing lower extraction rates. The article and research extracts simply re-enforce the extreme value play we have in NKWE Platinum, one of the world's largest undeveloped PGM mine with shallow depths and much higher grades in comparison to the industry peers.
The only headache we all have now. The Bengs, and the confusion we read of conflicting view points in the media. I am hoping to see an announcement confirming the latest events and to exactly how much ownership Genorah/NKWE Platinum has in the two farms (article mentions G/NKP only have 30% ownership?).
o
NKP Price at posting:
32.0¢ Sentiment: Buy Disclosure: Held
