Platinum prices jumped to their highest level in six weeks in trading following the killing of more than 30 striking workers Thursday at Lonmin Plc.’s Marikana mine in South Africa’s Bushveld during clashes with police. Ten people, including two police officers, had died earlier in what is being described as wildcat strikes and dispute between mine unions.
“Platinum futures have shot above a previous swing high level of $1430 due to acute supply disruptions in South African mines following recent labor unrest,” Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, said in a posting on the Futures magazine web site. He added that the next upside target for the noble metal is a $1510 high last seen in June. “We think the previous high of 1430 will be major support going forward,” he said.
Spot market prices were quoted at $1,473 per ounce in mid-day trading on Friday after climbing $36 an ounce from a day earlier.
South African mining companies have recently struggled with rising costs and prices which had fallen 21% in the past year. London-based London is the world’s fourth largest platinum group metal producer after Anglo American plc, Norilsk Nickel and Impala Platinum Holdings.
Lonmin executive said before the clash on Thursday that the company had lost six days of mined production, representing approximately 300,000 tonnes of ore, or 15,000 Platinum equivalent ounces. “Consequently, it is unlikely that Lonmin will meet its full year guidance of 750,000 saleable ounces of platinum, although the extent of the variation from guidance will depend on the timing and speed with which normal operations can safely resume,” the company said in a statement.
In a press release, the South African Institute of Race Relations called for the immediate suspension of police officers involved in the Marikana shooting and compared the shooting to the country’s apartheid era Sharpeville massacre, in which police opened fire on a crowd of black protestors, killing 69 people.
The institute said there had been clear evidence in the Thursday shooting that police randomly shot into the crowd of workers and had continued shooting after some workers fell and other turned to run.
“In our view, what happened at Lonmin is completely unacceptable,” the institute said. “We hold no brief for the use of violence in a labor or any other disputes. But even if the police were provoked or shot at during yesterday’s incident, or were angry at the killing of two police officers in the days before, no disciplined and properly trained policeman would shoot into a crowd.”
Phil Burgert is managing editor of ResourceInvestor.com. He can be contacted at email@example.com