Platinum loses its shine as Anglo American lowers its forecast

 
Courtney Goldsmith
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Platinum Prices Expected to Hit All Time High
Platinum is used in catalytic converter to control exhaust emissions in vehicles (Source: Getty)

Anglo American reported a six per cent rise in total production in the third quarter, but the miner lowered its platinum forecast after it mothballed a mine in South Africa.

Shares in the FTSE 100 firm rose 0.52 per cent to 1,451.5p at the market open.

Production guidance for platinum was lowered to between 2.3m and 2.35m ounces (from 2.35m to 2.4m ounces) due to the closure of unprofitable production at the firm's Bokoni mine. Atlatsa Resources, the operator, closed the mine in the quarter but will keep it maintained for potential use in the future.

Read more: The Royal Mint launches platinum bullion for the first time

Platinum producers have struggled to grapple with prices that have been stuck at around $930 an ounce. Prices were around $1,400 an ounce in 2014 until the commodity price crash.

"In platinum, we have taken necessary steps to remove unprofitable ounces from production as we focus on value over volume," said chief executive Mark Cutifani.

Anglo increased production guidance at its Kumba iron ore mine to between 42m and 44m tonnes from 41m to 43m tonnes previously following strong productivity performance at its Sishen mine.

Analysts at Investec said: "The lift in Kumba guidance is a particular positive given the high lump price that the market is still paying: $90 per tonne for spot 62 per cent lump, or almost 50 per cent above the price for spot 62 per cent fines. As recently as February they were almost trading in parity."

The miner's copper production rose five per cent to 147,300 tonnes in the quarter, reflecting higher grades.

Read more: Anglo American resumes its dividend payment six months early

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