File image: Reuters

Junior South African platinum producer Wesizwe Platinum said on Monday it had received a $650 million loan from the China Development Bank for its Bakubung mine project.

The loan comes against the backdrop of an expected increase in platinum demand from China and as major mining companies such as Anglo American move to close shafts as soaring costs make the industry in South Africa less and less viable.

Platinum is used to make emissions-capping catalytic converters in cars and in jewellry, which is in growing demand among China's burgeoning middle classes.

“Main commissioning of the mine is scheduled for 2018 and full production is anticipated in 2023,” the company said in a statement, adding that the project was “progressing well and remains on budget”.

The planned mine is near the city of Rustenburg where Anglo unit Anglo American Platinum last week unveiled plans to close two mines and cut up to 14,000 jobs in a bid to restore profits.

South Africa sits on top of 80 percent of the world's known platinum reserves but labour, power and other operational costs have risen much faster than the white metal's price over the past decade, squeezing margins. - Reuters