* S.Africa could lift platinum output 5 pct in 2011 * Zimbabwe picture clouded by political uncertainty
By Ed Stoddard
JOHANNESBURG, May 16 (Reuters) - South Africa could lift its platinum output by five percent in 2011 from 4.64 million ounces in 2010 but the prospect of strikes and a strong rand currency could curb expansion, metals refiner Johnson Matthey said in a report on Monday.
“In total, the South African platinum industry has the potential to increase production by around 5 percent in 2011, due to recovery at underperforming mines and the reopening of operations previously closed due to low prices or geological issues,” the refiner said.
“However, strikes and stoppages are factors which have impeded expansion in recent years and could do so again in 2011,” it said.
There are already signals that a tough round of wage talks looms in the industry and stoppages have already taken a toll on output so far this year.
South Africa’s National Union of Mineworkers (NUM) is demanding a 14 percent pay rise for its members at Impala Platinum (IMPJ.J), the world’s second-largest producer of the precious metal. [ID:nLDE7431OE]
And while top producer Anglo American Platinum (AMSJ.J) has kept its full-year production target of 2.6 million ounces it had a 5 percent fall in first-quarter output attributed to safety stoppages. [ID:nLDE73K058]
Johnson Matthey said in the longer term inflation, the strong rand currency and concerns about a tight power supply could put the brakes on expansion.
It said it anticipated an increase in supplies of newly-mined palladium from South Africa in 2011 with a ramp up of operations at Amplats’ Mogalakwena mine. It also said it saw further gains in palladium output from Zimbabwe.
Zimbabwe unlikely to pay for mine stakes- [nLDE7441UE]
Factbox on foreign miners in Zimbabwe- [nLDE73B1HX]
Factbox on major minerals in Zimbabwe- [nLDE7B1M9]
Q+A on Zimbabwe’s mine ownership targets- [nLDE73D08S]
On the platinum front there, it said “we expect production to increase this year” and noted Zimplats Holdings (ZIM.AX), the Zimbabwean unit of Impala Platinum, was expected to grow its annual output to 270,000 ounces by 2014.
But it noted that there “is significant uncertainty about the eventual impact of measures to increase indigenous investment in the Zimbabwean mining industry.”
It was referring to the government’s drive to force foreign miners operating there to surrender 51 percent of their local equity stakes to black investors in the country.
Zimbabwe has the second largest known platinum reserves in the world after neighbouring South Africa.
Johnson Matthey’s annual Platinum Report, the launch of which kicks off London’s Platinum Week gathering of traders, analysts, miners and refiners, is widely seen as the most authoritative commentary on the platinum group metals sector. (Editing by James Jukwey)