Platinum, Palladium Prices Soar amid Supply Concerns
A 17-week strike at South Africa’s PGM mine has caused Platinum and Palladium prices to skyrocket to the highest levels in three years
News of renewed violence in South Africa have caused platinum and palladium prices to climb nearly 16 percent this year. On Thursday, prices for the precious metal were at their highest levels since August 2011.
Metal analysts said palladium prices could continue to rise, possibly reaching the $860 an ounce area, which would be near the February 2011 high on a continuation chart. Platinum for July delivery rose 1.2 percent to $1,493.10 a troy ounce, the highest since Sept 2013.
A huge factor for the increase in price can be attributed to the ongoing strike. Since January 23, over 70,000 workers from the world’s three largest platinum and palladium producer, Anglo American Platinum, Impala Platinum and Lonmin have been on strike. South Africa’s labor court said earlier this week it would mediate fresh talks between the mining companies and workers’ unions as workers are seeking higher wages, which the companies say they can’t afford. The talks have been ongoing for weeks without success.
"There is a great deal of uncertainty in these markets right now, and that's pushing prices" higher, said Peter Hug, global trading director at Kitco Metals.
Roughly 10,000 ounces of platinum production and 5,000 ounces of palladium are lost each day the strike continues, costing the industry $1.8 billion in lost revenue. South Africa supplies approximately a third of the world's palladium and 80 percent of its platinum.
With the stoppage in production causing prices for the metals to soar, many market analysts believe it has potential to run higher.
One of the principals with LOGIC Advisor, Bill O’Neill, disagrees. He said short-term chart indicators suggest palladium may be overbought and if an agreement is made between the workers’ union and the mining companies, palladium will see a correction.
“The thing about strikes is that when they reach a resolution, markets can slump very quickly,” Smith said.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.