New laws that require foreign-owned mines to turn over 51 percent of their local ownership to black Zimbabweans could lead to trading opportunities in platinum and palladium. Brokers like Mark Goodman of Lloyds International, a firm that provides commodity trading services to clients in over 60 countries, predicts the legislation will have a big impact on the market, especially in regards to Zimplats Holdings, a subsidiary of the world’s second largest producer of platinum.
"Lost supply from Zimplats could turn the tide in the platinum market from surplus to deficit creating opportunity to profit from platinum trading," said Goodman.
Zimbabwe produces around 350,000 ounces of platinum each year, which equates to almost 6 percent of global supply. Zimplats would produce about 180,000 ounces of the country's platinum in the coming year.
Another boom would be in palladium, a material used in the catalytic converters of car and truck exhausts and in fuel cells.
"Production losses will also see an extension in the deficit of palladium,” said Lloyds International broker and long time precious metals trader Rick Amory. “Our trading discipline behind buying palladium is threefold - threatened supply, growing demand and a consistent rise in prices for several years now."