Platinum Australia Ltd. said it has commenced the commissioning of the processing plant at its Smokey Hills Platinum Mine in South Africa.

"We expect the Smokey Hills Mine to produce 45,000 to 50,000 ozs 4E PGM this financial year to 30 June 2009 and an average of 95,000 ozs per annum in future years," said managing director John Lewins.

Platinum Australia said its Smokey Hills mine will be among the lowest cost producers in the industry, with a projected average production cost of $350 per ounce as the current basket price of around $850. This would give them a margin of $350 per ounce when allowing for smelting and refining costs.

The company added it has hedged 15 percent of its annual production of platinum and palladium for the next five years at approximately $2,000 per ounce for platinum and $500 per ounce for palladium. – Thomson Financial