by Roman Baudzus, Gold Money:
Platinum has been outperforming gold recently. Aside from talk about trillion-dollar platinum coins this is because of the situation in South Africa, the world’s largest platinum producing country. The world’s largest platinum producer Anglo American Platinum (Amplats) has announced the closure of two of its mines and the sale of a third. This decision implies the dismissal of 14,000 employees – close to 3% of the country’s miners. The South African government has expressed its disapproval of these plans. Amplats’ announcement has stirred up renewed discussion among commodity investors about supply problems in the platinum sector.
According to an Amplats report, the closures imply 14,000 dismissals – close to 3% of the country’s entire mining staff. Commodity markets did not take long to react to the announcement. In late trading last Tuesday the platinum price surged above gold for the first time since mid-March last year. Amplats estimates that these plans will cut platinum production by 400,000 troy ounces. South African production accounts for approximately 75% of the worldwide supply of platinum group metals, which also include palladium.