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Uptick in platinum output expected

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ZIMBABWE’S platinum production is estimated at 467 000 ounces (oz) this year, up 4% compared to the corresponding period last year, data from the World Platinum Investment Council (WPIC) shows. In 2020, output stood at 448 000 oz.

DUMISANI NYONI

The country holds the world’s third-largest confirmed platinum reserves after South Africa and Russia, and what it produces has an influence on international output and pricing tendencies. There are three platinum-producing mines, namely Zimplats, Mimosa and Unki.

In accordance with the government’s target of attaining a US$12 billion mining industry by 2023, platinum is predicted to contribute US$3 billion per year. “Zimbabwe continued its long-term undisrupted production performance in the quarter (third quarter) with output of 111 000 oz, a modest 4 000 oz year-on-year decline.

Scheduled maintenance at several concentrators was in part offset by improved smelter output following a furnace reline,” WPIC’s latest quarterly global production report reads in part.

“Underlying Zimbabwean mined output is expected to grow next year due to processing debottlenecking and mine development.”

“However, the normalisation of semi-finished material through South African smelters and refineries is expected to result in Zimbabwean refined output remaining essentially unchanged at 465 000 oz,” it said.

Platinum production in the country rose 6% to 354 000 oz in the first nine months of 2021 from 333 000 oz in the comparative period.

Globally, total platinum supply is forecast to rise 19% year-on-year to 8 114 000 oz this year, still below the 2019 level despite the inclusion of the 380 000 oz contribution from the Anglo American Platinum converter plant (ACP) inventory unwind.

 Demand is expected to fall 5% year-on-year, as significant outflows from exchange traded funds (ETFs) and stocks held by exchanges exceed the collective year-on-year growth in automotive, jewellery and industrial demand.

Consequently, WPIC said its forecast surplus for 2021 has increased from 190 000 oz to 769 000 oz.

Notably, 14% growth in platinum automotive demand is anticipated despite the global semi-conductor shortage limiting automotive production.

WPIC said the dominant trends that influenced platinum supply and demand in 2021 are expected to continue into 2022, resulting in a projected surplus of 637 000 oz, although “this is very dependent upon the pace of the recovery in automotive production, as well as changes in global ETF (exchange-traded funds) and exchange stock holdings.”

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