JOHANNESBURG (Business Day) -- Platinum dazzled markets yesterday, rising to a new peak of $1,448.50/oz with analysts predicting that a weakening dollar could see the precious metal hit $1,500/oz by the end of the year.
Further stoking the emphatic upwards march of the mineral was the threat of industrial action and production breaks, with the national Union of Mineworkers (NUM) announcing a one-day stoppage to protest at fatalities and safety conditions at South African mines.
Miners Northam Platinum [JSE:NHM] and Anglo Platinum (Angloplat) [JSE:AMS] said they would shut shafts temporarily to investigate deaths of underground mineworkers, a move that is set to squeeze a market delicately balanced between supply and demand.
South Africa is the world's biggest producer of platinum. The Bushveld complex, stretching between the towns of Rustenburg and Lydenburg, contains about 80% of the world's known platinum reserves.
The surging platinum price was reflected in share price rises by Angloplat, the world's biggest platinum producer, which gained 1.24% to R1141, and Impala Platinum [JSE:IMP], the second-biggest producer, which added 1.5% to R244.
"We think platinum is the market with the best fundamentals out of the precious metals, and it's one that is vulnerable towards periodic tightness - particularly when Swiss implied inventories are low," said John Reade, head of metals strategy at UBS Investment Bank.
Adding to pressure on the price, the NUM said it would mobilise its 250,000 mining industry members for a one-day strike early next month to protest against the rising death toll in South Africa's gold and platinum mines.
Spokesman Lesiba Seshoka said yesterday that it would be the first industry-wide strike by mine workers - as opposed to strikes at specific companies - in 20 years. He said the union wanted to hold the stoppage as soon as possible, but certain legal procedures needed to be followed and workers consulted.
"A genocide is unfolding and the NUM is preparing for strike action that seeks to divert attention from the obsession with production targets to the one that deals with realising the sacrosanct human life," the union said.
Northam said a worker had died after a fall of ground 1.6 kilometres below surface. The NUM said two Northam workers had died in the previous two weeks, but the company had not reported the events. A Northam spokesman said there had been a total of three deaths at Northam since July 1, but until now the policy had not been to report single fatalities.
Angloplat said its Paardekraal shaft at Rustenburg would be closed temporarily after a worker died in an accident.
Spokesman Simon Tebele said the fatality, which has occurred in the midst of a rolling shutdown of shafts at Rustenburg to address safety issues after a spate of accidents earlier this year, did not indicate the safety exercise was ineffective. He emphasised safety was Angloplat's "number one" priority.
The latest accidents follow a black two weeks for safety in the mining industry, with three deaths at Gold Fields' Kloof mine, four at AngloGold's Mponeng mine and the fatality-free but potentially disastrous event in which 3,200 workers were trapped underground at Harmony's Elandsrand gold mine for up to 48 hours before being evacuated.
In the 12 months to August there were 206 deaths in South Africa's mining industry, on a higher number of workers employed, compared with 201 deaths the year before.
The main reasons for mining fatalities, according to Mine Health & Safety statistics, are falls of ground and accidents involving transport or machinery. But this does not explain why the death toll has risen in the past year despite the industry's commitment since 2003 to improve safety, which showed positive results until 2005.
The NUM attributed the continued high death rate to "ignorance and negligence." Other mining commentators have suggested it reflects the inevitable risks associated with deep-level mining, the bonus system that favours production over safety, high turnover of contract staff, insufficient training and lack of management commitment to safety. With Reuters.
