Tuesday, 10th May 2005 (2620 views)

Gold sales in South Africa are currently being overshadowed by the sudden surge in demand for its platinum group metals (PGMs).

PGMs now provide the country's largest mining export earner, accounting for a third of all sales last year - whilst gold exports followed behind with 32.5 per cent, according to figures from the minerals and energy department's latest Minerals Bureau Bulletin (MBB).

Gold producers in the region are being squeezed by high costs and the strong rand.

Revenue fell by 11 per cent last year, to R29.3 billion, where in 2003 it was R33.1 billion.

By contrast, the PGM market was worth R33.2 billion last year, compared with R28.8 billion in 2003.

A mining analyst told Business Day that the switch in values of gold and PGMs "had been on the cards for some time", with platinum prices in South Africa remaining strong.

All ferrous metals are seeing prices rise due to continued demand from the Chinese steel industry - which could lead to fresh investment in metals production in South Africa.

"It appears that these conditions will persist into the near future, probably till 2007, as the demand for ferrous commodities is unlikely to subside anytime soon," commented Mpumzi Bonga, of the MBB.

 

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