Published: 11 December 2013

ZIMBABWE has extensive potential to become the world's leading producer of platinum, on the basis of an improved performance in its macro operating environment.

CPM Group platinum analyst Erica Rannestad said recently Zimbabwe has a huge amount of resources, a lot of which is unknown and un-delineated.

"The potential is really large. However, the political environment is still very not conducive to investment in the industry," she said.

Currently neighbouring South Africa is the largest platinum producer in the world but its platinum sector has been wracked by strikes this year, losing 44 000 ounces of potential output.

Although South Africa presently provides about two thirds of the world's platinum mining output, analysts Johnson Matthey are of the opinion that platinum companies are not likely to expand their projects in the outlook period due to the high operating costs in that country.

"In the current price climate no South African producer can afford to significantly expand capacity," wrote Steel in a November 22 report. "Should demand increase significantly, producers might not be able to respond to the increased appetite for the metals," added the report.

On the other hand Zimbabwe's platinum sector is a potential area of expansion due to the much lower operating costs. All of Zimbabwe's platinum producers have their parent companies in South Africa.
- bh24

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