Minerals council dismisses the idea of controlling the platinum price

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Gwede Mantashe, minister of mineral resources, said South Africa, working together with Russia was looking into finding way of control the supply and the demand of platinum.
Gwede Mantashe, minister of mineral resources, said South Africa, working together with Russia was looking into finding way of control the supply and the demand of platinum.

The chief executive of the Minerals Council SA Roger Baxter has dismissed the idea that South Africa, as the single biggest producer of platinum, could control the price by limiting the supply of the metal.

Speaking to City Press on the sidelines of the at third annual platinum group metals conference held at Mintek head office in Randburg earlier in the week, Baxter rubbished the idea after Mineral Resources Minister Gwede Mantashe said the country, working together with Russia was looking into finding way of control the supply and the demand of platinum.

“It’s very narrow thinking to expect that South Africa can control the platinum price by limiting supply like Organisation of the Petroleum Exporting Countries does on the oil.

"The simple reality is that a significant portion of the global platinum market is in areas which have very big areas of competition,” he said adding that the key issue, which he agreed with Mantashe on, was that the country needed to find new ways to grow the market.

Baxter said that South Africa finds itself in the same position it was with gold in the past decades where it was the biggest producer in the world.

“It’s very much the same position we enjoyed in the 1960s where were the biggest producer of gold because in 1970 where we were at the peak and produced 1000 tonnes of gold and that was 77% of the world’s newly mined gold at the time,” Baxter said.

Addressing the media after holding a bilateral meeting with his Russian counterpart Dmitry Kobylkin, Mantashe said South Africa, Zimbabwe and Russia, together produce 90% of the world’s platinum but still don’t control the price.

“We are hoping to work together to maintain the value of platinum group metals. Let’s protect platinum and increasing its demand and ensure we preserve a good price for platinum,” he said.

Mantashe said the Brics corporation agreement signed on platinum signed with Russia at the 2013 Brics Summit was an important launchpad to ensure both governments have more control over their platinum.

He further said in order to increase demand of platinum, new uses for it needed to be found and both countries also agreed to work hand in hand to market platinum group metals.

“The reason that we take it to Brics is because there is more consumption in Brics. If we can get platinum fashionable in China and India, that alone will go a long way and make a huge difference,” he said adding that marketing of platinum is already under way.

He pointed out that because of the free market economy, innovative ways of controlling the supply and demand of platinum group metals were needed for the countries like South Africa to get maximum benefit from its resources.

“We must find innovative ways of ensuring that we control the supply and demand of platinum group metals,” he said.

Mantashe said the government was hoping to collaborate with Russia on marketing and promoting platinum group metals internationally and maintaining value of platinum.

Mintek mooting commercial wing

State-owned research council Mintek is looking into the possibility of a having a commercial wing and possibly a whole new profit company that will commercialise and offtake from Mintek’s research.

Speaking to City Press on the sidelines of the conference, acting chief executive of Mintek, David Msiza said the establishment of the commercial was being discussed with the mineral resources department, the science and technology department as well as the University of Cape Town.

“The form is not yet finalised because obviously because there will be engagements with the trade and industry department,” Msiza said.

Mantashe told media that a commercial wing for the state-owned research council would be viable in order to commercialise its products.

“Mintek should have a commercial arm because once you have done the experiments, you cannot commercialise it by a small scale showcasing. There must be outlet out there that markets those researched products,” Mantashe said addressing the media shortly after the conference.

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