Platinum shares are expected to offer more long-term value than investment in South African gold mining projects, according to brokerage Vestact's chief executive Paul Theron.

In an interview with Moneyweb, he said that although the performance of gold had been 'volatile', even the recent currency problems would not reduce platinum's profitability for significant periods.

Taking Angloplat's decision to reschedule its expansion plans (of 3 million ounces a year by 2006) as an example, he said the consequent stalling of production would boost platinum prices.

Angloplat's main rival, Impala Platinum, is also expected to do well, thanks to a major restructuring of its shareholding structure.

Expansion plans such as the offer to buy out minority shareholders in Zimbabwe Platinum (in which Implats already has a 50 per cent stake) have proved popular, Mr Theron said.

'The market really liked that deal, and the sale of Barplats is also a good idea', he noted. Operational costs are comparatively light in Zimbabwe, thanks to the shallower level at which platinum resources are found in the country.

The platinum industry's major problem, the price of the rand, is only a 'medium term' one in Mr Theron's view. 'There are a number of reasons why sanity will prevail and the rand will weaken - foreign investors may yank their cash out when rates drop', he said.

Such a development would not only restore former export profitability levels, but also make projects such as the Angloplats expansion viable once more, enabling that company in particular to maintain its share price by offering stakes in new operations to minority shareholders.

The industry's other main challenge - the royalty bill - must also be negotiated, especially when the risk of double payment is present as is the case with Impala, which already pays a royalty to the Royal Bafokeng Nation.

Although some investors may be scared off by the forthcoming levy, Investec Asset Management portfolio manager Daniel Sacks said the royalty would only be payable in the next four to five years, and there are more pressing issues for the market to consider.