Commodities & Metals

Platinum Tanks on Lonmin Strike Resolution News (PPLT, PALL, GLTR, PLG, SWC, GLD, SGOL)

Platinum is taking a very serious, and likely long overdue, breather this Tuesday. Reuters has reported that the highly troubled mine under Lonmin in South Africa is going to have its workers return to work on Thursday with a 22% pay raise. The violence of August resulted in the deaths of more than 30 protesters and caused injuries to close to 80 others.

The troubled Marikana platinum mine was at the center of the boom in platinum. Prices in the last 30 trading days climbed from under $1500 to above $1700 before a sudden drop today went the price of an ounce of platinum dropped to under $1620 from over $1660.

The ETFS Physical Platinum Shares (NYSEMKT: PPLT) ETF is suddenly down 2.6% and we are seeing moves elsewhere too. The ETFS Physical Palladium Shares (NYSEMKT: PALL) ETF is now down 1.25% to $65.73 and this was just around $57 in mid-August. The ETFS Physical PM Basket Shares (NYSEMKT: GLTR) is still up 0.6% at $100.29 because it holds gold, silver, platinum and palladium.

Will Rhind, Managing Director of ETFS Securities, told us, “Platinum prices are reacting negatively today to the news that Lonmin workers have agreed to improved pay conditions and are subsequently returning to work on the 20th Sept. The short to medium outlook for the mining sector still remains uncertain while strikes continue at other mines in South Africa, including gold. With 80% of the world’s supply of platinum coming from South Africa the threat of a supply disruption is ever present.”

The company called Platinum Group Metals Ltd. (NYSE: PLG) with “platinum” in its name is down 6.5% at $1.13 so far today after the news. Stillwater Mining Co. (NYSE: SWC) has fallen by 4.5% to $12.28 so far today on the news.

Gold has started to soften a tad as well, with the SPDR Gold Shares (NYSEMKT: GLD) up only 0.4% at $171.15 and the ETFS Physical Swiss Gold Shares (NYSEMKT: SGOL) up about 0.4% as well.

JON C. OGG

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