South Africa is the world’s most abundant producer for platinum group metals, and Japan – a major car producing nation – is hoping that its stake in the precious metals mining nation will pay off once it sells its shares to the highest bidder.
Japan Oil, Gas and Metals National Corporation, an energy company owned by the Japanese government, is looking to sell 28 percent of its stake in a new mining facility in South Africa so automakers have a substantial supply of platinum, a key component in automotive manufacturing, Bloomberg reported. The mining facility is located in northwest Africa that’s believed to produce platinum with layers that are 30 times thicker than what’s typical.
Taro Kabashima, an executive for the government-owned energy firm, told Bloomberg that with platinum supplies dwindling in South Africa, the fresh supply will come in handy for manufacturers.
«We saw that if South African supply drops [further], it would be a major headache for Japanese carmakers,» Kabashima explained.
According to most precious metal experts, roughly 40 percent of platinum goes toward the automotive sector and an even larger percentage of palladium, platinum’s sister metal. Catalytic converters, which reduce greenhouse gas emissions from fuel burning engines, are made almost entirely of palladium and platinum.
Approximately 60 percent of the world’s platinum derives from South Africa. In 2014, a five-month-long strike by mineworkers brought the industry to a grinding halt, as mineworkers hit the picket lines in an effort to compel producers to pay higher wages. Producers and miners finally settled upon an agreement, but inventory is still at levels not keeping up with the pace of demand.
South Africa isn’t the only major producer of platinum, however. Other platinum mining nations include the United States, Russia, Canada and Zimbabwe, according to the U.S. Geological Survey.
Gold rally expected to be short lived
Posted by Danielle Leiner
European economic concerns and continued speculation about whether the Federal Reserve will raise interest rates has gold prices tracking closer to the $1,200 per ounce threshold.
On the Comex division of the New York Mercantile Exchange on Tuesday, gold was trading for roughly $1,180 per ounce, the Wall Street Journal reported.
Over the past several weeks, prices for the yellow metal have been jockeying between $1,160 and $1,190 per ounce territory, largely due to the volatility of stock markets both in the United States and Europe.
Bill O’Neill, a broker for investment firm Logic Advisors, told the WSJ that this is actually a good development for the commodity.
«There is a general nervous tone to markets today that is favorable for gold,» O’Neill explained.
He cautioned, however, that gold’s rally is likely momentary, as lower prices are expected to win out due to economic conditions improving. For instance, the private sector added 270,000 jobs to the economy in May, furthering the notion that the Federal Reserve will, in fact, raise interest rates before the year is out.
«I don’t think the fall in gold is over,» Afshin Nabavi, head of trading at wealth management firm MKS, told Reuters. «We’re not seeing any kind of r
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