The chairman of the JMEX steering committee has indicated that the chances of a Johannesburg commodity exchange system going ahead are unlikely.

Mark Lentin, chairman and convener of the committee, told Mineweb that research into the possibility had suggested that it held no benefits.

"The fact that South Africa is a primary producer of metals does not give it any advantage for marketing its goods through a local exchange," Mr Lentin commented.

Carried out by South Africa's department for trade and industry, the research was designed to evaluate potential methods of increasing the value of metals prior to international shipment.

Phase one included a study by London-based metal consultancy Virtual Metals into the potential benefits of a South African/African Metals and Commodities Exchange, which would focus on the trade of platinum, palladium and gold.

"Virtual Metals' research revealed little in the way of cogent arguments to support the sponsors electing to proceed with the proposed phase two of this project," explained the report.

The study added that a physical market for the commodities was needed and that it would have to compete with already established exchanges in order to be successful.


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