Elandsfontein mine output may double

Elandsfontein mine output may double

South African platinum miner Eland Platinum Holdings Ltd said it is considering plans to double output at its flagship Elandsfontein mine project in response to strong platinum prices.

Eland, which operates in the Bushveld Complex, is likely to decide by June on whether to boost output to “almost 600,000 oz/y” starting in October.

Chief executive David Salter told Bloomberg that “the first phase has been laid out with that in mind and that the odds are very good that we`ll go for it,” adding that metal from the second phase will probably be poured from about 2011.

Eland, like leading producers Anglo Platinum Ltd and Impala Platinum Holdings Ltd, wants to increase production to help plug a global shortage that`s lasted seven years and has caused market volatility in the price of the metal – most notably when platinum spiked in November last year.

Platinum prices used in jewellery and anti-pollution devices for cars, have risen strongly during the last five years and hit a record US$1,402.5/oz in November before coming off to trade at around US$1,125/oz.

Shares of Eland, established in South Africa in the second half of 2005, have soared 61% since an initial public offering on the Johannesburg Stock Exchange last year when it raised R525 million to help fund the development of Elandsfontein.

Mr Salter expects the R1.4 billion first phase of the mine to start producing concentrate by October 2007 after an R800 million loan from banks led by South Africa`s fourth-largest lender Nedbank Ltd is in place.

However, news reports quoting banker Mark Tyler have suggested that these plans could be delayed by three months as “there were still items outstanding that Eland Platinum needed to submit.”

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