Platinum price has best price improvement prospects
JOHANNESBURG-SA (April 6) The platinum price has better improvement prospects than virtually any other commodity, Cadiz Corporate Solutions mining director Peter Major said on Thursday.
Speaking at a breakfast to publicise the upcoming Junior Indaba on June 7 and 8, Major cast doubt on gold going much higher, said iron-ore was heading for a fall and forecast a lower coal price by year-end.
“I think platinum has a better chance of going up than almost any other commodity,” Major said, positioning the currently low-priced precious metal as being “very close to its mean”.
“It’ll probably stay there for the next couple of years, I would guess. I’ve got a lot of my pension fund in platinum, as opposed to gold,” he added at the function, which was opened by Junior Indaba chairperson Bernard Swanepoel, who is also president of AHI, the small-to-medium enterprise representative organisation.
Major questioned the current price of steam coal: “I don’t know what it’s doing up here, but it’s fighting gravity, so I definitely do not see coal above $80/t by the end of this year,” he commented.
He sees the iron-ore price of $80/t-plus as being way too high: “That’s one of the heaviest commodities we’ve got; there’s no way it’s going to stay up this high,” he said, projecting that it would be closer to $60/t by the end of next year.
He described the zinc price as being at its mean: “Good news can only last so long in the kind of environment we’ve got here today,” he said, adding that he would be surprised if the zinc price was still in the $2 800/t range this time next year – but he could also not see it dropping significantly lower.
Both fluorspar and uranium were plumbing the low-price depths, with the fluorspar price unlikely to drop any lower.
“If I had to put money into a commodity now, it would be platinum first and fluorspar a close second,” Major said.
He cast doubt on the chances of the gold price remaining at a level higher than $1 250/oz and attributed its current performance to the instability created by US President Donald Trump.
The high gold price was excellent news for the countries producing a lot of it, which regrettably no longer included South Africa.
“It’s great news for China, Russia, America, Canada and Australia. They produce a lot,” he said, but added that he could not see rising price prospects for gold.
“I think it could be at $1 200/oz next year, but I just cannot see it going any higher. There’s just too much gold out there,” Major said ahead of the Junior Indaba, which highlights the opportunities open to junior mining companies.
From being the world’s most ambitious mining country, South Africa’s mining industry was the most destroyed industry without a world war.
“We’re now stripping and destroying mines. We’re killing more people than ever in our shallow gold mines, but because most of the people are illegals, they don’t get counted by our police or our government,” he lamented.
It is extremely difficult for the mining industry to make money with electricity prices that have risen so high.
While State electricity utility Eskom was once supportive of mining, that is no longer the case.
“Who is running the mining industry today? Everyone or no one? Only the correct policies can lift us from this because we’re reverting to the mean,” he warned, pointing to the way policy change had resurrected mining in the Democratic Republic of Congo and Zambia.
He drew attention to the policy change in Chile, which resulted in a growing mining industry despite falling commodity prices, and said policy change in South Africa could return the country to being an investors’ dream.
Source: MiningWeekly
