By Leia Michele Toovey- Exclusive to Platinum Investing News

Share Platinum got mixed reponse on Thursday, July platinum rose USD2.40 to USD1,207.60 an ounce, while September palladium declined US3.35 to USD239.70. The drop in the three month contract price was related to declining crude oil. Last week, prices of both platinum and palladium climbed to their highest levels since November 2008-buoyed, in part, by the announcement of General Motors’ bankruptcy.

It may seem odd that the bankruptcy of a major consumer of platinum would be positive for prices; however, over the past weeks the metal’s price already reflected the impending bankruptcy.  Now the market has shifted its focus, and like all precious metals, platinum has seen a significant boost recently from investors looking for hedges against the increasingly likely threat of inflation.

Platinum’s majority use is industrial, which would make you assume that it would behave like a base metal, however, it is classified as and behaves like a precious metals, such as gold and silver, due to its use in jewelry and its effectiveness as an inflationary hedge.  On Wednesday, data showing the biggest annual drop in consumer prices since 1950 sent shockwaves through they economy. U.S. consumer prices edged up in May, but fell over the past 12 months by the most since 1950, a sign that inflation was no threat for now.

Company News

Platinum Group Metals has revealed that production at the Western Bushveld Joint Venture will be boosted after it secured a C$35 million financing deal. The company intends to pay Anglo Platinum C$28 million for the restructuring of the site, with the remaining funds used to conduct a review and update of its feasibility study As a result, the project should be able to produce between 235,000 oz and 271,000 oz pgm platinum, palladium, rhodium and gold  at a steady state for about nine years. “We are very pleased to complete this C$35 million financing with the support of our larger shareholders and our strong team of underwriters,” said Platinum Group Metals President Michael Jones. “The net proceeds of this financing provide the company with the means to rapidly advance its Western Bushveld projects through value engineering and implementation preparations and we expect to be making solid progress in the weeks ahead.”

Lonmin’s shares plummeted as the company’s so-called “No 1″ furnace at its Marikana site in the Bushveld region of South Africa was shut down. The furnace has been subject to frequent shutdowns in its short, seven-year life and only last November underwent an extensive rebuilding intended to keep it running while repairs were carried out. Yesterday lonmin announced that a leak of molten metal at the weekend had forced the closure of the furnace for about 30 days. The company has fired up its three standby furnaces, which together have about half the capacity, to minimize the impact on production. Even so, its shares fell nearly 10 per cent in response.                                                                                                                

A wage increase of six percent offered by the world’s number one platinum miner Anglo Platinum has been rejected by the National Union of Mineworkers (NUM).In a statement on Wednesday, NUM said it had put a demand for a 15 per cent increase in wages, as well as an increase in the minimum wage offered to workers.  The union also demanded that maternity leave be extended to six months with pay and that the company phase out labour brokers. We appreciate the small moves that Anglo Platinum made and look forward to further moves” said Oupa Komane, NUM deputy general secretary. The next round of wage negotiations will take place on June 25 and 26.

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