* FY output forecast down slightly from original fcast
* Sees platinum price at year end between $1,750-$1,800 oz
* Says Zimbabwe ownership rules do not reflect risk/reward
(Recasts, adds quotes, background, bylines; REFILES to correct Impalats to Implats in headline)
By Agnieszka Flak and Ed Stoddard
JOHANNESBURG, May 17 (Reuters) - Impala Platinum (IMPJ.J) cut its output target on Tuesday and its chief executive said Zimbabwe’s drive to wrest majority local stakes from foreign mining firms could curb future expansion in the country.
David Brown, the CEO of the world’s second biggest producer of the metal, said the group would now likely produce 1.82 million ounces of platinum in its financial year which ends in June from an original forecast of about 1.85 million ounces.
“We will probably produce somewhere around 1.82 million ounces, maybe 20,000 ounces lower than originally anticipated and that’s really because of lower third-party deliveries than we originally expected,” he said.
He also told Reuters Insider in London that he saw the platinum price XPT= at year end at between $1,750 and $1,800 an ounce and palladium at between $700 and $800 an ounce.
For the Reuters Insider interview, click on: link.reuters.com/ter59r
“Palladium still has more upside. There are two factors that are impacting on the palladium equation. The Russian stockpiles are significantly reduced compared to previous years, that means supply will be slightly lower, and certainly the demand fundamentals are very, very strong, particularly in Asia.”
Brown also addressed the issue of political risk in Zimbabwe, which has the world’s second-largest platinum deposits after South Africa and where Implats’ unit Zimplats (ZIM.AX) is responsible for around nine percent of group production.
The government there wants foreign mining firms to surrender 51 percent of their local equity to black investors in the country. They have until the end of September to comply and Implats has already submitted its plans to the government regarding the issue. [ID:nLDE7481Z9]
Brown said Implats was not opposed to the idea in principle.
“But having said that, what we are opposed to is the 51 percent. We just don’t believe a 51 percent equity stake adequately reflects the risk/reward equation and quite clearly will impact significantly on future expansions,” he said.
In neighbouring South Africa, miners are scrambling to meet a far more modest target to place 26 percent of their stakes into black hands by 2014 as part of a policy to redress the imbalances of white apartheid rule.
On the issue of tight power supplies — a big concern to South African miners as state-run utility Eskom [ESCJ.UL] scrambles to meet growing demand — Brown said he saw no immediate impact on output.
“We have had ongoing negotiations with Eskom... certainly we don’t see there will be any material impact on our production profiles over those periods,” he said, referring to the peak energy June-August winter months in South Africa.
Brown was in London for Platinum Week, an annual gathering of analysts, miners, refiners and other industry participants. (Editing by James Jukwey)