Platinum firms losses confirm metal doldrums
If there were no redevelopment projects miners would eventually go out of business under the current market conditions.
The drop in the share prices of Northam Platinum and Impala Platinum after they reported losses this week shows that recovery in the industry is still far from certain. Northam Platinum's share price fell 5% on Friday after it posted its loss, although it had narrowed it from R273-million to R226-million in the six months to December. World number two platinum producer Impala Platinum's share fell 4.6% on Thursday after it reported a loss of R328-million for the six months to December compared with a profit of R218-million a year earlier. Paul Dunne, Northam Platinum CEO, said on Friday that the market still had not accepted South Africa's PGM production was declining. The platinum industry has been in the doldrums for the past 10 years, with the platinum price in that period 16.86% lower. More recently, the price has increased, up 9.28% in the past year. But this is marginal compared with other industrial commodities.
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