Platinum prices made gains on Tuesday, climbing to $1,525 per ounce. Platinum’s current low point for 2010 came early in February when prices fell to $1,470. Since then, the metal made considerable gains through February, March and April with prices climbing as high as $1,731 per ounce before falling again in May.  Despite those losses, the metal has been trading between $1,500 and $1,600 per once since and is still up 5 percent since the start of the year, an impressive feat given the lingering fears  that the European debt crisis could still trigger a double-dip recession.

New York-based commodity consultant CPM Group thinks platinum’s outlook is strong. In its 2010 Platinum Group of Metals Yearbook, CPM Group said the platinum market will see a narrower market surplus in 2010 on the back of strong investment interest during the launch of U.S. platinum-backed exchange traded funds and a recovering auto industry.

“Investors are expected to remain attracted to platinum because of the potential for price appreciation based on the metal’s positive supply and demand fundamentals,” the report said.

CPM’s report echoes statements from Johnson Matthey’s Platinum report released in May, which also suggested platinum’s supply-demand fundamentals would improve as automotive sales and other industries picked up. Johnson Matthey predicted these improved fundamentals, combined with increased investment, could drive platinum prices over $2,000 an ounce before the end of the year.

However, CPM also says higher prices will to lead to South Africa increasing production by 6 percent in 2010, which would leave the platinum market in surplus for another year.

China and India Driving Auto Sales

Platinum demand is largely reliant on growing auto sectors in China and India. The metal is primarily used as an auto catalyst to clean vehicle emissions and these two countries continue to drive worldwide auto sales while markets in North America and Europe recover.

China’s auto sales rose 30 percent in the first half of 2010, moving 7.18 million units, and remains the world’s largest auto market. Auto production jumped in China too, up nearly 45 percent over the same period in 2009.

And even though auto sales dropped 5 percent in June from a year ago, analysts are expecting a rebound in the fourth quarter. The Chinese government decided to extend an auto replacement subsidy program until December 31 this year and it is expected consumers will wait until the last minute to buy a new car before the incentives expire.

In India, sales continued to boom in June, riding on high domestic demand. Tata Motors posted the largest jump in passenger car sales for June, up 63 percent and selling close to 28,000 vehicles. This increase places Tata as the second-largest player in India’s domestic market, surpassing Hyundai Motors who reported a 19 percent increase in domestic sales for June. The country’s largest car-maker Maruti Suzuki posted 18 percent growth in June.

Colossus Minerals Inc. (TSE:CSI) reports its drilling for the extensions of precious metal mineralisation on the recently expanded land package situated in Para State, Brazil

The first drill‐holes of the 5,000 metre drill program are targeting the down‐plunge projection of high grade gold‐platinum‐palladium mineralisation in the Central Mineral Mineralised Zone (”CMZ”). To the northeast of the current drilling, the CMZ comprises shallowly‐dipping mineralisation on the upper limb of a southwest‐plunging reclined synclinorium cored by meta‐siltstones and steeply‐dipping mineralisation below this and in the hinge zone of this fold (see www.colossusminerals.com for details). The folded meta‐siltstone is interpreted to extend for at least one kilometre to the southwest of Mining Permit 850.425/1990.

For complete news release, click here.

For Colossus Minerals’ company profile, click here.

Pan African CEO Jan Nelson is quoted saying:

“In addition, the drilling program underpins the high quality of the asset, and will further enhance the operating margin of the project and increase the value to Pan African’s bottom line.”

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Malema is quoted saying:

“I sit in the national executive committee… I know nationalization is on the agenda of the ANC. All mineral rights should be transferred to the state-owned mining company… where the state will hold a minimum of 60 percent shares, and for the remainder of the 40 percent, the private corporations should pay royalties and tax.”

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Michael Solomon, chief executive officer of Wesizwe is quoted saying:

“The agreement will provide Wesizwe with the financial muscle to enable it to examine future growth opportunities.”

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Mr. Celaro, a Brazilian citizen, has 35 years of in-country experience in engineering, construction, and mine management. Mr. Celaro worked for Vale S.A. for 9 years where he was involved in the development of several new mines in Brazil and abroad. After leaving Vale, he was a director of Bechtel/Promon, an engineering consortium responsible for metallurgy and mining contracts in Brazil. Additionally, he was the start-up engineering manager of Rio Tinto Alcan Inc.’s Morro do Ouro Mine (now Kinross Gold Corporation’s Paracatu mine), and the construction and pre-operation manager for Goldcorp Inc.’s Amapari Mine. Most recently Mr. Celaro oversaw the construction of Luna Gold Corp.’s Aurizona Gold Mine.

Randy Reichert, President and COO of Colossus Minerals says:

“Luiz brings to Colossus a strong pedigree of successful mine construction and start-ups. His engineering and management experience will be invaluable for Serra Pelada, where he will oversee the construction of the mine, plant, and related infrastructure.” “We welcome Luiz to our team.”

For complete news release, click here.

For Colossus company profile, click here.

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Analyst Charles Kernot at Evolution Securities is quoted saying:

“Lonmin’s troubled smelter has failed yet again, further undermining the company’s outlook for the rest of this year.”

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Wesizwe CEO Michael Solomon confirmed that this transaction can bring in mining expertise and cost-effective financing.

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The study has recorded a fall of 39 percent in platinum demand. This is a contraction of 1.43 million ounces in gross demand of platinum in the auto sector last year to 2.23 million ounces.

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