The Executive Commercial Manager of Mvelaphanda Resources has explained today (3rd October) that the platinum mining industry in South Africa is in a period of considerable flux.

James Wellsted has pointed out that a combination of January's Eskom power crisis and the current turmoil in the global financial markets is changing the ownership possibilities for major firms.

He also suggested that 'Platinum consolidation' certainly seems to be the current buzz phrase in the industry, with larger miners looking to maintain production levels as juniors struggle to keep pace.

He said: "We have seen quite a dramatic pullback in metal prices recently, which has taken a lot of the euphoria out of the market and certainly taken the fizz out of the smaller platinum players that are not in production yet.

"The big producers have also come down 30 per cent to 40 per cent, but among smaller companies, who are still in development phase or getting into production, the impact is more dramatic and there has been a bigger pullback in the ratings."

Indeed, juniors find their hands tied as they are unable to secure the funding required for self-generation with the credit situation in meltdown, and even if they do manage it, investors are hovering for a good deal.

A number of potentially major deals have been reported recently, such as Impala Platinum's desire to acquire Mvelaphanda and Northam to create a 'South African-controlled platinum champion'.



Source:

Strong poised to grow stronger as platinum industry mulls consolidation (03/10/08)
http://www.miningweekly.com/article.php?a_id=143702