With the price of platinum increasing so much because of the problems in south africa, it would be good to find a company on the LSE that has good production outside of south africa. Can anyone make any suggestions?

LONDON -

What a week to return from a 14-day holiday in laid-back Goa! Markets crashing and partially recovering, a 0.75 percent US Fed interest cut, a rogue trader losing Soc Gen $3.5 billion and Africa's economic powerhouse descending into banana republic chaos through incredibly bad forward planning by its state-owned electricity utility, resulting in virtually all the country's major mines being shut down for safety reasons. What are we due for next week?

Hopefully things may calm down a bit as traders sit back and assess the global economic situation and the commodities sector a little more rationally - but perhaps that's too much to ask for. There are obviously winners and losers out there - metals commodities are mostly seeing signs of strength, but the stock markets in general are in an extremely nervous state with most observers believing that there is more adverse financial news to come and wondering if the U.S. can really stave off a recession.

As far as the mining sector is concerned, the southern African power supply crisis is likely to have the biggest impact. It's not only South Africa which is suffering, but also Zambia, Zimbabwe, Botswana and now Namibia which are having problems - the latter because it had previously relied on South African grid power for a key proportion of its electricity needs and has been told that this cannot continue. Zambia is getting some relief by importing power from that model of democratic stability the DRC!

Where does this African chaos leave the metals commodity sector? The commodities most likely to be affected are copper and cobalt, primarily from Zambia , diamonds from Botswana, uranium from Namibia and most of all platinum and gold from South Africa.

But it is not only current production that is being affected, but planned expansions and new projects will be strongly impacted as extra power consumption from national grid supplies will just not be available until perhaps the middle of the next decade. This means that new operations in particular, if they are to go ahead, will require to install massive independent power generation facilities which are expensive to purchase or hire and to run and could seriously affect capital and operating costs and make some projects unviable. With banks being cautious about providing major loan facilities while the global credit crunch continues, there are bound to be major delays in bringing many of southern Africa's new projects on stream which will be giving number-crunching commodities analysts a fair amount of work to do over the next month or so as they will have to rework their new metals supply forecasts.

As we pointed out here yesterday, the biggest short term impact is likely to be in the platinum group sector. South Africa is by far the dominant world supplier due to its huge reserves on the Bushveld Complex northwest of Johannesburg, and with some interesting new areas being opened up too nearer the Botswana border. Because of the power crisis the country's three biggest producers, Anglo Platinum, Impala and Lonmin have all closed their operations until they can be assured of continuity of power supplies which, according to power utility Eskom, may yet take two to four weeks.

There is no doubt, though, that systems will be put in place to enable the mining companies to restart and maintain their operations sooner rather than later as mothballed power stations are brought back on line, maintenance work is accelerated and major industrial users manage to save power consumption in all possible areas. But, new projects are likely to suffer badly as the country just can't afford to supply major new power consumers until the system can support them.

As the markets realised yesterday, the overall impact on the world gold sector, despite South Africa's major contribution to world supply, is not as significant to the global commodity sector as the initial surge in the gold price might suggest, and the gains were rapidly cut back for the yellow metal to close at lower levels. But the impact on world platinum supplies could be tremendous.

Platinum supply is already seen as being in deficit and even a temporary shutdown of the major producing mines will have a significant short term impact. But perhaps more importantly virtually all the projected new mine supply increases under way are in South Africa and some of these projects are now bound to be delayed through lack of power or altered economics. This will adversely affect future supply predictions and as a consequence platinum group metals prices will remain stronger for longer. Perhaps platinum ETFs may prove as good a way as getting into this investment sector as any as projected earnings for the miners themselves may not be as good as past estimates would suggest as expansions are delayed.

The power problems in Zambia will also have an important impact on copper supplies, and of cobalt, although here the rescue' with power from the DRC being specifically targeted at the Copperbelt operations may mitigate the effects somewhat, but here again new copper projects in the whole southern African region will be delayed. Projected new uranium production in Namibia will also likely be held up, which could herald a slight recovery in yellowcake prices.

In crises like these there are always going to be those who gain. But be aware that the positive increases in price likely as a result of the power crisis may not benefit those producers who are also having their costs and production programmes adversely affected!

Another play worth considering is, IPSA. They have agreements in place with the SA government to replace existing power stations with liquid to elect powerplants. SP has risen 40% on Thurs and FRi last week.

Other pgn producers around the world are, Canada, the Lac des Iles mine owner North American Palladium Ltd Western Ontario.

USA, Stillwater and East -oulder mines owner Stillwater Mining Company in Montana.

Russia, Norilsk Talnakh mines owner Norilsk Nickel in the Urals.

Sorry one of my letters isn't working at the moment. the second letter of the alpha-et.

thanks mate, I have something to get tucked into now

Sorry Arthur, but none of the above are LSE listed. However there are a few more options in Zimbabwe if they are not affected by SA power shortage. Three mines are, Unki, operated by Anglo Platignum and listed on Japanese stock exchange. Zimplats, operated by Impala Platignum listed on Japanese stock exchange under the ticker of IMP. Finally Mimosa, operated 50-50 by Impala and Aquarius platignum, which is listed on LSE under AQP. Mimosa produces about 85,000 ozs of platignum per annum. Hope this helps.

AQP has been on my watchlist for several years now. Rising from 2 to 17 in two years, just had a share split 3 for 1, current sp about 5.50.

LONDON (Thomson Financial) - Aquarius Platinum Ltd said mining operations at its Kroondal, Marikana and Everest Mines in South Africa were affected by power outages since last Friday and have returned to near normal since Tuesday.

In a statement, the company said it was not yet possible to forecast the total production losses and said the power outages were demanded by Eskom, South Africa's national power utility, due to unusually high rainfall which limited supply of coal from collieries.

The company said Eskom has subsequently agreed to 90 pct of normal power from Thursday.

Aquarius said mining operations at its Mimosa Mine in Zimbabwe have returned to normal after power outages last week and said normal operations at its Everest Mine will see a slow return to normal.

PMCI based in India, but be careful as they are awaiting a court decision to be able to mine there.

30 Jan sp 5.50, 4 Feb sp 7.40. Thats a 35% hike in 2 trading days.

April 4 (Bloomberg) -- Platinum rose as the dollar weakened and as concerns mounted that output may be disrupted from South Africa and Zimbabwe. Palladium fell.

``I don't see the situation in South Africa improving any time soon,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``Platinum is up because of the dollar, and on sagging confidence in the South African electricity situation being rectified, and supply slackness in Zimbabwe.''

Platinum futures for July delivery rose $17.60, or 0.9 percent, to $2,030.50 an ounce on the New York Mercantile Exchange. Still, the metal fell 0.9 percent for the week, following a 9.1 percent gain in the previous week.

Platinum soared 34 percent in the first quarter, more than the 33 percent gain for all of last year, after electricity shortages shut South African mines for five days in January. Power supplies have been limited since then. The metal reached a record $2,308.80 an ounce on March 4. South Africa supplied 78 percent of the world's platinum in 2007, according to manufacturer Johnson Matthey Plc in London.

Palladium futures for June delivery fell $3, or 0.7 percent, to $444.40 an ounce in New York. The price fell 22 percent last month, the most in five years, and 2.3 percent in the past week.

Platinum will probably ``test its all-time high within a couple of months,'' Otstott said, while palladium may rise to $600 an ounce this year. Both metals are used in pollution- control components for vehicles and in jewelry making.