Palladium

The Zimbabwean reports Angloplat, the world's number one producer said it was optimistic about coming to an agreement with the Zimbabwean government over its Unki mine and Aquarius Platinum's record quarter was thanks to the performance of its Mimosa mine in Zimbabwe amid continuing talks. The government of Zimbabwe, the country with the largest platinum reserves outside number one producer South Africa, is demanding 51% of all foreign-owned mines operating in the country under its so-called indigenisation laws.

Gold is sidelining platinum and palladium and could hit $1 800/oz by Christmas, says UBS bullion bank precious metals strategist Dr Edel Tully, who describes the present as “an extremely exciting time” to be in precious metals. Tully expects gold to be in deficit in 2011 as a result of only moderate mine-supply growth, a lower level of recycling than in 2009 and the steady buying of gold by central banks.

The world’s fourth-largest platinum miner Aquarius Platinum increased its attributable production by 3% year-on-year to 114 260 platinum group metal (PGM) ounces, but CEO Stuart Murray said on Tuesday volumes from South African operations fell short of the company’s expectations. Challenging conditions at Kroondaal, Marikana and Everest mines negatively impacted on production, but Murray said operations were now moving towards normal production.

According to a new report by Business Monitor International Russia's mining sector is set to grow slowly over the forecast period to 2015, marking a reversal of the declining output seen since 2006. Business Monitor forecasts the value of the mining sector to reach US$259bn in 2015 from US$134bn in 2010, marking an annual average growth rate of 2.6%.

Lonmin PLC (LMI.LN), the world's third largest primary platinum producer, Thursday said it expects to meet its annual platinum sales target, provided there are no work stoppages, and raised its annual unit cost guidance to reflect reduced output in previous quarters. The U.K.-listed, South African miner expects to sell 720,000 troy ounces of platinum in the financial year ending Sept. 30 and expects annual unit costs to rise 11%, up from a previously forecast 8%, due to production setbacks stemming from industrial action and six fatalities during the first six months of the financial year.

Thunder Bay-based Zenyatta Ventures has ended its dispute with Constance Lake First Nation after the leadership of the 1,470-strong community decided to no longer pursue a motion of injunction against the junior explorer in exchange for better co-operation and preferential job opportunities. Zenyatta can now advance its Albany project south of the so-called Ring of Fire in the James Bay lowlands where it is exploring for nickel and platinum group metals with a purported value in excess of $1 billion.

In 2001 palladium reached $1,080/oz when gold was only $300/oz and platinum $715/oz. Three factors will help fuel palladium to surpass its 2001 high and well beyond says Market Oracle: Chinese auto production is expected to go from 18 million units in 2010 to a staggering 30 million vehicles by 2020. A vehicle's catalytic converter requires about 1/20th of a troy ounce of palladium and/or platinum and since platinum costs 124% more than palladium ($1,735 vs $776) it is reasonable to assume automobile manufactures will elect to use cheaper palladium. Secondly the looming palladium supply deficit and thirdly the exemplary success of pure palladium ETFs which already have over $1 billion in assets representing roughly 1.3 million oz of palladium taken off the market.

Norilsk Nickel, world number one nickel and palladium producer and Russia's biggest miner, announced on Friday it is restarting operations at its Maggie Hays mine near Lake Johnston in West Australia. Norilsk mothballed Maggie Hays bought from BHP and the other Australian operations it acquired in 2007 two years later as the financial crisis cut demand. Stainless steel production accounts for around two-thirds of nickel consumption.

Shares in the platinum and precious metals mining company rose as much as 6.4% at the start of the session to an intraday high of $4.98 before the broad market soured during Fed Chairman Bernanke’s second day of testimony on Capitol Hill.