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By Leia Michele Toovey- Exclusive to Platinum Investing News

As platinum just start down the road to recovery, analysts are already warning that supply threats are likely to boost the metals price to new highs. Platinum prices may climb above $1,500 an ounce “in the next couple of years” as demand recovers amid supply constraints in South Africa, the world’s biggest producer, according to Banc of America Securities- Merrill Lynch.

The world’s largest platinum supply comes from the Bushveld Igneous Complex (BIC) in South Africa. Platinum and palladium production from the BIC represents 72% and 34% of annual global production respectively.  In the past power shortages in the region have left platinum in short supply- and this is partially responsible for the precious metal hitting last year’s high of $2,301.50 an ounce.  Platinum’s record high was short lived. As the economic crisis spread around the globe, the price of the metal plummeted, declining 39 per cent last year, the steepest loss since 1988.  So far this year the metal has rebounded 28 per cent, outpacing silver and gold as signs of an economic rebound spurred demand. Platinum October platinum gained $3.4, or 0.3%, to $1,191.4 an ounce, while September palladium rose $1.25, or 0.5%, to $261.45 an ounce. Gains in platinum are in part being driven by the threat of strikes in South Africa

Company News

The largest producer of platinum in the world, Anglo Platinum Ltd, has received a funding boost by parent company Anglo American Plc. Anglo American, 80 per cent owner of the unit, made available to the platinum miner an additional $913 million USD. Anglo American has been struggling with skyrocketing debt after the crash of platinum prices. Anglo Platinum is currently reviewing all expenditures and financing requirements in order to be able to move into profitability. Chief Executive Officer Neville Nicolau is cutting more than 10,000 jobs and may suspend more output in South Africa to slow the rate at which Anglo Platinum’s debt rises amid falling demand for the metal. The funding review is aimed at “restructuring its existing borrowings,” Anglo Platinum said today. Net debt was 17.96 billion rand at June 30, up threefold from a year earlier. Labor costs are likely to rise as Anglo Platinum negotiates an annual wage increase with unions in South Africa, where yearly inflation was 8 percent in May. The company’s last offer was for an 8 percent increase. Employee and contractor wages comprise almost 55 percent of Anglo Platinum’s costs, according to a June 5 note by Anglo Platinum plans to produce more of the metal with fewer employees, helping to keep costs below 2008 levels for the next three years.  A July 23 note by Liberum Capital brought to the forefront how the miner was faring in this tough economic climate. The England bases research and Investment Company noted “Anglo Platinum is saddled with debt and in “imminent need of recapitalization, most likely via rights issues.”

Workers at Impala Platinum Holdings Ltd. have agreed for a lower wage increase of 15 per cent, down from the 17 per cent demanded last week, according to the National Union of Mineworkers. The labor union will meet with the company tomorrow, said union spokesman Lesiba Seshoka. If Impala doesn’t improve its offer to raise wages by 8.5 per cent, the union may go on strike.

Aquarium Platinum Ltd. is preparing to restart production at its Everest mine in South Africa.  Bermuda based Aquarius closed the mine just 7 months ago; after subsidence made part of the mine unstable. It will take approximately 10 months to restart production. Aquarius has estimated that it will cost $31 million USD to restart production. The company, which also has operations in Zimbabwe, will build two new shafts to access rock containing platinum at Everest. Aquarius is “quite comfortable” with an insurance settlement agreed in response to a claim made by the company for subsidence and loss of earnings, Aquarius spokesman  Willi Boehm said by phone.

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