Platinum stockpiles boost SAfrica '09 supplies-JM

SAfrica underlying output down, sales boosted by stocks

* Zimbabwe output rises

By James Macharia

JOHANNESBURG, Nov 17 (Reuters) - Supply of platinum from South Africa, the world's top source of the precious metal, will rise by 5 percent this year, with the sale of stocks countering lower output, a leading metal refiner said on Tuesday.

The producer of four fifths of the world's platinum, will see supply rise by 210,000 ounces to 4.73 million ounces in 2009 mainly due to sales of the metal produced last year, but were unsold until this year, Johnson Matthey (JM) (JMAT.L) said in its Platinum 2009 Interim Review.

Although three new mines have started up in South Africa, and a number of others have increased production, output of platinum concentrate will fall, but changes in refined stocks will ensure supplies will increase, JM said.

Global supply of platinum, used in auto catalytic converters to remove pollutants from exhausts, and in jewellery, is seen rising 1.9 percent to 6.06 million ounces, revising some of the decline seen last year, JM said.

Platinum production fell in South African due to shaft closures, accidents and strike action, mainly at Impala Platinum Holdings Ltd. (Implats) (IMPJ.J), the world No. 2 producer of the metal which supplies 25 percent of the metal globally, from its South African and Zimbabwe mines. [ID:nLD693787]

"The South African mining industry has again been hit by a range of problems," JM said in its report.

"Underlying production of the metal will fall in South Africa due to shaft closures, accidents and strike action."

JM said output at Impala will drop due to mine accidents and a two week strike, while bigger rival Anglo Platinum (Angloplat) (AMSJ.J), a unit of global miner Anglo American Plc (AAL.L), would see production fall after it shut some shafts.

Angloplat, which accounts for about 40 percent of the global supply of the metal, shut the unprofitable shafts, denting production, but overall output for this year was seen be better than last year.

In 2008, Angloplat's output suffered when it closed Amandelbult, its second biggest mine, owing to flooding, a problem it has so far avoided.

Lonmin Plc (LMI.L), the world's No. 3 platinum producer -- which aims to boost its refined platinum production to 850,000 ounces by 2013 from 700,000 ounces currently -- is expected to be hit by a decision to cut some production at its Marikana operations, and closing its mine in Limpopo. [ID:nLC466308]

Smaller rival Aquarius Platinum Ltd (AQP.L), the world's fourth biggest platinum producer, will also produce less due to the temporary closure of its Everest mine.

Supplies of palladium from South Africa were forecast to rise by 4.1 percent or 100,000 ounces to 2.53 million ounces, primarily from Angloplat's Magalakwena operation.

ZIMBABWE OUTPUT UP

Zimbabwe, which has the second largest reserves of platinum after South Africa, was forecast to lift output this year despite its political and economic crisis.

Supplies of platinum from Zimbabwe were forecast to rise to 225,000 ounces this year, mainly due to a jump in output at Zimplats Holdings ZIM.AQ, in which Implats has a majority stake.

JM said supply of platinum from Zimbabwe and other producers rose to a total of 330,000 ounces from 295,000 ounces in 2008.