South African platinum mines to face water restrictions

JOHANNESBURG (Oct 5)  Platinum operations around the South African mining city of Rustenburg will face restrictions on the amount of water they can use to mitigate problems caused by a drought, the Department of Water Affairs said on Friday.

"This is potentially important. Mines are huge users of water in the processing operations and in some cases the mining operations. It's a very arid part of the world," said Jonathan Butler, an analyst at Mitsubishi.

The world's three largest platinum producers, Anglo American Platinum (Amplats), Impala Platinum and Lonmin all have operations in the area although Amplats' mines are not producing at the moment because of a week-long strike.

"Lonmin has been impacted by current drought conditions and we have plans in place to manage water usage as stringently as possible," Natascha Viljoen, executive vice president of process and sustainability at Lonmin, told Reuters earlier this week.

Amplats and Implats officials were not immediately available for comment.

South Africa's platinum belt accounts for about 75 percent of global supplies of the precious metal.

The premier of North West Province, where Rustenburg is located, last month declared a drought across the whole territory.

"The Rustenburg local council is about to introduce water restrictions. The platinum mines will be affected though I'm not aware to what extent they will be affected," department spokesman Themba Khumalo said on Friday.

It's been a volatile year for those investing in gold and silver.