Canadian Miners Crack SA's Lucrative Platinum Market
Source: Globe and Mail, Geoffrey York (2/21/11)
"Canadian expertise is playing a huge role in finding the new stuff."
Everything changed when the industry was shaken up by a new mining act aiming to strengthen black empowerment and force the use of idle mining licenses. Today there are at least five Canadian mining companies in the Bushveld, the main platinum field in South Africa.
South Africa's platinum industry, which generates $7-billion in annual production and provides about 75% of global platinum output, was a "closed shop" for most of its 85-year history, according to Mr. Jones, president and chief executive officer of Vancouver-based Platinum Group Metals Ltd.
"The smorgasbord is getting consumed," Mr. Jones says. "It was great for 60 or 80 years, but now you've got to be more creative. The known reefs are getting deeper and tougher, and Canadian expertise is playing a role in finding the new stuff. Canadian companies are making a huge difference in looking in new places that aren't along the conventional reefs."
Under the new mining legislation that took effect in South Africa in 2004, mining companies were required to find "black economic empowerment" partners for a significant share of their business. They were also required to use their existing mining licenses—or lose them.
Canadian entrepreneurs were among the first to win access to the new licenses and partnerships. Since then, Canadian mining companies have jumped in with both feet.
"There was a sense that a lot of companies were just sitting on assets, effectively sterilizing the country's natural resources base," said Joel Kesler, head of corporate development at Toronto-listed Anooraq Resources Corp. "The Canadians have shaken up this industry nicely."