Major Platinum Find Fails to Make a Dent in Prices

A new, huge deposit of platinum found in South Africa didn’t halt the recent rise in the metal’s price today, dealers said.

The South African government survey department confirmed a report in Johannesburg’s Business Day newspaper that a four-year study had identified massive reserves near the capital.

The government said only that the find could be larger than previously thought, and added that Business Day’s report that it would double the country’s reserves was exaggerated.

Dealers said the news had only minimal impact on the market. Platinum, which rose sharply largely on technical factors in New York late yesterday, opened at $561 an ounce and later moved to $562.50. It closed yesterday at $544.

Gold, meanwhile, continued to show a firm tone and was fixed in London this afternoon at $380.75 an ounce, up more than $2 from yesterday’s New York close. The price touched a high of $399 early last week.

“The idea that there are immense (platinum) reserves in South Africa is not new,” said one analyst at a major Swiss bank. “More crucial is when will a decision be taken to develop a new mine and how long it will it take to develop it.”

Richard Harris, a mining analyst with Shearson Lehman in London, said: “I doubt very much that the South Africans will mine it for at least 20 years. I see the find as having absolutely no effect on the market.”

Platinum, which is gaining in importance through its growing use in catalytic converters for cars, has risen sharply in recent weeks, pulling up gold in its wake. It peaked at around $565 an ounce last week from around $500 earlier this month and $235 a year ago.