Midnight Sun receives exploration license renewal for Solwezi copper project in Zambia
The project is 6 miles from Africa’s largest copper mining complex, the Kansanshi mine held by First Quantum Minerals.
On Friday, palladium and platinum prices continued to drift lower with Nymex contracts for March delivery down slightly to exchange hands for $736 and $934 an ounce respectively.
While gold is down nearly $180 an ounce since Donald Trump’s victory in the US presidential elections and silver and platinum have both dropped, palladium has gained more than 10% over the same period. Measured from its January low palladium is up more than 56%.
Platinum has underperformed the precious metals complex and now trades only 7.7% for the better in 2016 following a 28% slide over the course of last year.
Together Russia and South Africa control between 70% and 80% of the world’s supply of PGMs, with the latter dominating platinum and rhodium output.
Statistics released on Thursday show South African PGM production fell by 5.7% year on year and 4.5% month on month in October, but a new note from Capital Economics sees the fall in output doing little to support prices:
It is possible that the recent weakness in platinum prices – prices were 9% m/m lower in rand terms and 8% m/m lower in US dollar terms on average during the month – is starting to weigh on miners’ profitability, incentivising them to cut output.
Indeed, there were no reports of any major disruption that could justify such a big drop in production. That said, output is now only down 1.2% year-to-date, which might not be sufficient to rebalance the market. Above-ground stocks remain abundant and demand might not grow as strongly once the effects of China’s stimulus in the first half of this year start fading.
