File image: Reuters

Cape Town - Russia and South Africa, which together control about 80 percent of the world’s reserves of platinum group metals, plan to create a trading bloc similar to OPEC to control the flow of exports.

“Our goal is to coordinate our actions accordingly to expand the markets for realisation of these metals,” Russian Natural Resources Minister Sergey Donskoy said yesterday in an interview at a summit of leaders from Brazil, Russia, India and South Africa in Durban.

“The price depends on the structure of the market and we will form the structure of the market.”

Platinum, used to make autocatalysts and jewellry, has risen 2.3 percent this year on increased demand from the auto industry and amid supply disruptions at mines, after the average price slumped 9.8 percent last year.

South African Mines Minister Susan Shabangu confirmed that the two countries aimed to counter oversupply of platinum, and said possible measures could include taxes and incentives.

“We’re not really controlling the market,” she said in an interview in Durban.

“We want to contribute without creating a cartel, but we want to influence the markets.”

Other platinum producers will be invited to join the bloc, which will be similar to the Organisation of Petroleum Exporting Countries, Donskoy said.

The aim will be to open up new markets rather than limit exports, he said.

Russian and South African officials signed a memorandum of understanding today to cooperate in the industry.

“We are now forming working groups to work out joint actions on this market,” and aim to coordinate export volumes, Donskoy said.

“There will be a meeting in the summer to discuss mechanisms in detail.” - Bloomberg News