Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
- Chief Editor -
Mr. Macro
Geoff Garbacz, Mr. Micro
- Chief Strategist -
Mr. Micro
Dan Hassey, Mr. Retirement
- Senior Stock Analyst -
Mr. Retirement

Gold and Energy Advisor's Real Wealth

Real Wealth #145  01/25/2008



This is how the market will bring $5,000 Platinum into reality.

Supply interruptions will show the South Africans and Russian that $2,000 Platinum won't hurt the amount of U.S. dollars they're taking in for their production.

 

They'll quickly realize they can raise the price of Platinum to $5,000 sell 20% of the metal and will actually receive more net dollars. $5,000 platinum will become a reality very quickly.

 

The supply of platinum is drying up thanks to South Africa's Platinum miners, including the world's three biggest producers of the metal, being forced to suspend mining operations in the country due to a power shortage, driving their share prices lower and causing spot platinum prices to surge to record highs — up as much as $67 in a single day to a new record $1652.00 an ounce..

Anglo Platinum Ltd. (AMS.JO), the world's leading producer of platinum, has suspended all operations in South Africa after the country's power supplier said it couldn't make guarantees about the supply of electricity to mines, a spokesman said Friday.

Impala Platinum Holdings Ltd. IMPUY  35.00, +3.70, +11.8%) , the global platinum number two, has halted operations at its largest mine near Rustenburg, spokesman Bob Gilmour said. He said the company's smaller, largely surface operations at its Marula mine continue to run.

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Platinum is starting to make its move from $1500 to $5,000. Supply interruptions from South Africa and Russia will fuel a rapid rise in the price of Platinum that will lead the producers to realize they can raise the price more than three fold and sell just 20% of their mine production. We believe our new price target for gold $5000 may be achieved in the next 24-36 months.

 

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London-based Lonmin PLC (LNMIY  60.10, -0.55, -0.9%) has ordered all workers at its mines to the surface and operations should be shut during the afternoon, spokeswoman Alex Shorland-Ball said. She said smelter and process operations, however, continue.

Angloplat spokesman Trevor Raymond said the Johannebsurg-based company's mines had electricity, but a decision was made to conserve power. He added there was no indication how long operations would remain shut down.

Implats' Gilmour said all deep-level mining operations in the country would have to be suspended for safety reasons. He said state-owned utility Eskom Holdings Ltd. sent a letter to companies requesting that they conserve electricity, and suggesting mines close down because a supply of power might not be maintained.

The country's largest gold miners, which operate the deepest mines in the world, also have been forced to suspend operations. At 1015 GMT, shares in Angloplat were trading down 2.9% at ZAR942, Implats was off 3.2% at ZAR240 and in London Lonmin shares were 2.3% lower at 2960 pence.

Spot platinum prices reacted to the suspension of activity in South Africa, the world's biggest producer of the metal, by rocketing to fresh record highs. Gold too touched new highs as production was curtailed by mines in the country. Platinum prices hit a record high $1652 a troy ounce, gains of 3.7% on the day while gold prices touched a record $922.80/oz, up 3.6%.

Eskom late Thursday said adverse wet weather conditions in South Africa have affected its power production capability, exacerbating the tight supply situation of last week as generating capacity was lost to repairs and maintenance.

"The prognosis is that load shedding will continue for the next two to four weeks," the company said.

Public Enterprises Minister Alec Erwin on Friday described the situation as a national emergency, although he said growth in the country's economy at current healthy levels can continue "if we change our behavior and become more energy efficient," the South African Press Association reported.

 

Best Wishes,

 

James DiGeorgia

Editor and Publisher

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