Platinum group metals production fell in the three months to November, dragging down total mining production figures, according to the latest data from Stats SA.

Total mining production in the three months declined 3.8% from the previous three months.

Production of the group that includes platinum, palladium, rhodium, ruthenium and iridium fell 13% in the quarter to November from the three months before. Coal production for the period declined 2%. Platinum metals and coal account for almost half of mining output.

According to the latest Johnson Matthey interim review for the platinum industry, global demand for platinum is forecast to rise 2% to a new high of 6.71-million ounces last year, mainly because of robust purchases of platinum for use in vehicle catalysts.

Supplies of platinum, however, would be only 6.59-million ounces, the report said.

Platinum touched a near 26-year peak of $1,022/oz yesterday, having risen from about $850/oz a year ago.

Palladium, which was trading at about $190/oz a year ago, touched $295 last month and is currently at about $275/oz.

TheBullionDesk, a U.K. precious metals information service, forecast in a report this week that platinum could reach a record high of $1250/oz this year and palladium could touch $480/oz.

Analysts and industry sources said yesterday that the fall in local platinum production in the period to November could reflect a short-term lack of refined metal from Anglo Platinum as a result of a smelter shutdown.

Angloplat accounted for half of South Africa's projected annual production of about 5.1-million ounces for last year. However, refined platinum production would pick up again in the first half of this year.

The company said in an update on its Polokwane smelter shutdown in October that normal operations would resume in mid-December.

It forecast refined platinum production for last year would fall to 2.45-million ounces from 2.6-million ounces.

Stats SA figures show November's metals and minerals production fell 3.4% from November 2004, reflecting an 11.3% decline in gold production as well as of coal and platinum group metals.

Gold production has been in decline for several years due to the closure and restructuring of unprofitable mines in response to the strength of the rand.

In 2004, South Africa's gold production fell 9% to 342 tonnes, its lowest since 1931, and in the first half of last year it fell another 15.5%, according to Chamber of Mines figures.

South Africa earned R12.5 billion ($2.07 billion) from metals and minerals sales in October, according to Stats SA, which was a 19.5% improvement on the corresponding month a year earlier, as prices of metals had risen.

Sales of gold fell 10.6% to R2.1 billion ($349.1 million) while sales of nongold minerals rose 28.3% to R10.4 billion ($1.66 billion).

South Africa is the world's biggest producer of platinum and gold.

According to the Chamber of Mines, the platinum industry was South Africa's single biggest export earner in 2004, accounting for about 8.1% of total exports.