Platinum prices to rocket on nationalisation

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Platinum and palladium prices might advance because new mines might be delayed after the government ordered Anglo Platinum and other mining companies based outside the country to cede majority stakes to Zimbabweans, TD Securities has said.

Palladium’s shortage might widen while platinum might move into deficit earlier than forecast in 2013 if there was a reduction in new capacity in Zimbabwe, TD Securities said in a report. Zimbabwe is the third-biggest platinum producer after South Africa and Russia and the fifth-biggest in palladium, according to UK-based research company GFMS.

“Resource nationalism has become an increasingly important issue in recent years,” Bart Melek, an analyst at TD Securities in Toronto, said.

“Such policies tend to serve as hurdles that discourage investment in developing new capacity.”

Zimbabwe said in a March 25 decree that overseas mining companies had to explain within 45 days how they would cede 51% of their local assets to “indigenous” Zimbabweans.

The move comes at a time when Australia, Canada, Chile, Venezuela, Peru and the Democratic Republic of Congo had considered raising taxes or taking stakes in mining companies to boost budget revenues, TD Securities said. – Bloomberg