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FACTBOX- A look at South African platinum production

Tuesday, 30 Oct 2012 | 3:30 PM ET

Oct 30 (Reuters) - Here is a look at platinum production in South Africa as strike-hit South African miner Lonmin, the world's third-largest platinum producer, plans to raise $800 million from its investors to help slash debt.

* Supply and demand - In 2011 supplies of platinum from South Africa were a total of 4.855 million ounces - an increase of 5 percent or some 220,000 ounces, accounting for 75 percent of the global total. Given net global demand of 6.05 million ounces, the platinum market was in a surplus of 430,000 ounces last year.

* The increase in South African output was due to the release of metal from in-process and refined inventories, with at least 250,000 ounces of platinum supplied from South Africa coming from above-ground stocks.

* Underlying mine output actually fell by 3 percent or around 120,000 ounces in 2011, a year that was supposed to show a rise in production. Safety stoppages were the main cause and illegal stoppages added to industry troubles. In 2012 South Africa was gripped by its worst labour unrest in decades following a violent strike that broke out at Lonmin's Marikana mine in August.

* South African platinum miners Amplats, Impala Platinum and Lonmin were under pressure even before the wave of strikes in 2012, hit by rising labour and power costs and the expense of safety stoppages that were part of a government clampdown on fatalities. They have also been hammered by a steep drop in the price of platinum, down about a third from its record high in 2008.

* Platinum's sharp price drop has come as a result of falling demand for the metal, which is chiefly consumed by the automotive sector for use in catalytic converters. It is particularly heavily exposed to the beleaguered European car market, which has a higher concentration of diesel cars - which use a higher loading of platinum than petrol engines - than the United States or China. This has seen a significant decline.

Sources: Reuters/Johnson Matthey Platinum 2012 (Reporting by David Cutler, London Editorial Reference Unit)

(Editing by Keiron Henderson)

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