Platinum Group seeks S. African assetsCanada's Platinum Group seeks S. African assets
Fri 19 Oct 2007, 5:19 GMT
By Atul Prakash
LONDON (Reuters) - Canada's Platinum Group Metals is scouting for more mining rights in South Africa, the world's top platinum producer, and is seeking permits to start construction at its existing projects in the country.
"We have been very actively looking in South Africa. We have applied for a lot of new areas and are planning to make further investments in the country," R. Michael Jones, president and chief executive of the company, told Reuters on Thursday.
"In platinum, if you are not in South Africa, you are not in the game," he said in an interview.
South Africa accounts for three-fourths of the world's platinum production.
"The new Mineral Act means that in a lot of areas, you have gone from literally thousands of private mineral rights holders to a single mineral rights holder, which is the state," he said.
The practical aspect of being able to make a deal in South Africa and explore had changed dramatically with the act, Jones said, adding the country was expected to see growing exploration investment and discoveries in the next five years.
The company is now working on 'Project 1' of the Western Bushveld Joint Venture, in which Platinum Group Metals and Anglo Platinum, the world's top platinum producer, have 37 percent each, while South Africa's Wesizwe Platinum owns the remaining stake.
Platinum Group aims to complete a bankable feasibility study by the end of the current year and expects mining permits from the government the next year, with construction of the mine starting soon after the approval.
Production at the mine was likely to start in 2010 and was expected to attain the full capacity of 250,000 ounces a year of platinum group metals by 2012.
TOTAL RESERVES
The total mineral resources at its 'Project 1' have been estimated at about 8.6 million ounces, including 2.3 million ounces of measured reserves and 5.02 million of indicated reserves, Jones said.
Measured reserves are estimates on which a company is very sure after extensive exploration on the site, while indicated reserves are the additional output that a firm expects to produce from the mine.
Platinum Group has an 18.5 percent stake in another mine in the area. The project, which might start mine construction next year and is estimated to produce 260,000 ounces of platinum group metals a year, is operated by Wesizwe Platinum, which owns a 63 percent stake. Anglo Platinum holds the rest.
Jones said the company hoped that power problems in South Africa and safety issues at mines would be effectively tackled.
"We expect the challenges, but the challenges affect the whole industry. Strategically we are in a very good position because we have shallow resources with an excellent grade."
"Electricity is in very short supply. We have been in conversation with the electricity supplier and they are well aware of these projects and their needs and demands," he said.
South Africa's biggest mining union has formally applied to hold a one-day strike to protest against deaths and accidents at the country's mines, which have so far claimed some 150 lives.
State power utility Eskom this month lost 4,700 MW of electricity due to planned maintenance, 2,030 MW through unexpected shutdowns and a further 1,400 MW to coal supplies that were soaked by heavy rains, the Business Report newspaper said in a recent report.
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