CHALLENGES afflicting platinum miners in South Africa could provide opportunity for Zimbabwe to increase production of the white metal, an international expert in the sector has said.
The world's biggest platinum mine in Rustenburg, South Africa was hit by industrial action that halted operations for six weeks early this year, costing the Impala Platinum company at least 120,000 ounces in lost production.
Another South African miner Aquarius Platinum announced it would close its Everest mine only days after announcing the closure of its Marikina mine.
Royal Bafokeng company meanwhile said it was returning to the markets to raise more funds for its operations.
Mitsui and Co. Precious Metals strategic analyst David Jollie said in a recent report that mines in South Africa would be hard pressed due to escalating operating expenses.
"There are a lot of things going on, but the major issue is cost pressures, and you can see some of those are because we are looking at first generation mines which are becoming more expensive to operate," he said.
"You can see wage increases, you can see all sorts of things, and that is in an environment where you have got weak commodity prices at the moment that has just made life quite difficult."
Mitsui and Co.is a U.S. based trader of precious metals and is a full member of the London Platinum and Palladium Market and London Bullion Market Association.
Jollie said the situation in South Africa would provide leverage for countries like Zimbabwe to maximise production.
He said more mine closures were likely to happen in South Africa due mostly to high operating costs unlike in Zimbabwe where costs were marginally lower.
"Zimbabwe clearly is one of the major areas where you could see growth. There are price pressures in Zimbabwe, but they are not quite at the same level and part of it is because these are not in many cases first generation mines that are becoming less attractive to mine," Jollie added.
Zimbabwe is the third largest platinum producer in the world after South Africa and Russia.
Three mines are presently operating in Zimbabwe namely the Zimplats, Mimosa and Unki platinum mine.
Platinum accounts for about 36 percent of the country's total mineral production with about 230,000 tonnes exported in 2010.