Nomura Upgrades South African Platinum Producers

Platinum production

VENTURES AFRICA – Leading financial services group Nomura upgrades its ratings of top South African platinum producers as strikes come to an end, prompting hikes in share prices.

As strikes that have been plaguing the whole span of South Africa’s industry draw to a close, leading financial services and investment banking group Nomura today chose to change its ratings for a number of top South African platinum producers.

In a research note to investors sent out today, Nomura raised ratings for Anglo American Platinum (Amplats), Impala Platinum (Implats), Lonmin, and Aquarius Platinum.

Amplats saw its ratings go up from “reduce” to “neutral”, prompting a 3 percent rise in share prices on the news of the upgrade, with shares trading at 380.96 rand ($43.16) in Johannesburg.

Implats also received the green light for investors, with a new rating of “buy”, increased from the previous “reduce” rating. In turn, Implats also saw share prices grow by 2.8 percent following the upgrade, trading at 146.83 rand ($16.64) on the JSE.

Meanwhile, infamous platinum producer Lonmin also merited a re-grade in the advice to investors, upgraded to “buy” from the previous “reduce” rating. Stock in the platinum miner – which signed a wage agreement with striking miners in October, providing for increases of between 11 and 22 percent prompting the wide-spread “copy-cat” strikes – also grew, trading at 69.49 rand ($7.88): an increase of 4.4 percent.

Junior miner Aquarius Platinum received an upgrade to “buy” from “neutral”, prompting stock in London to soar 8.64 percent on news of the re-grade, shares trading at 41.0125 Pounds ($65.22).

The news will be welcome to the South African platinum industry, which has seen significant dents to output over the past months while production was halted due to illegal strikes by the work force.

UK-based experts Johnson Matthey have estimated that South African output will take a 12 percent hit for 2012, with a predicted production of only 4.25 million ounces of platinum for the year.

As such, it is thought that the global platinum market will experience a 600,000 ounce reduction in output globally for the year, which will level out at 5.84 million ounces – the losses largely attributable to the South African shortfall.