LBMA/LPPM Precious Metals Conference

Platinum and palladium availability Upside, but not straightforward

Walter de Wet, CFA* [email protected] September 2013

Please refer to the disclaimer at the end of this document. This document is not investment research, as it has not been prepared in accordance with the requirements designed to promote the independence of research. It therefore constitutes a “marketing communication” as defined by the UK FCA Handbook, and must not be considered a Research Report under US or any other regulatory regime. U.S. Disclosure: Standard Bank Group Limited does and seeks to do business with companies covered in its reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

1

Contents

Page

Platinum and palladium – upside, but not straightforward

01/10/2013

 Platinum and palladium are deficit markets, but…

3

 We estimate that above-ground inventory is high for both metals

7

 Palladium recycling is set to rise, but probably not soon enough

11

 But questions remain over loadings in China autocatalysts

14

 China becoming more sensitive to the platinum price

17

 Outlook – still higher prices but not straightforward

21

1

LBMA/LPPM Precious Metals Conference

2

Contents

Introduction All in one  Despite large deficits forecasted, we believe platinum and palladium markets are less tight than market consensus.  The price behaviour of platinum and palladium seems to indicate large amounts of above-ground inventory, which we believe calls for a focus on the inventory of these two metals.  Our estimates of above-ground inventory of platinum is 1,046 days of consumption, and 879 days for palladium — probably higher than market consensus.  Our analysis raises questions; most importantly, is it possible that this much metal can be held in inventory, and, by extension, who is holding the metal? We believe that a fairly large portion of inventory, especially for platinum, may indeed be tightly held.  We expect China’s demand for platinum to become more price sensitive, while there is substantial upside for palladium recycling. However, palladium recycling is likely to ramp up only in 2018.  For now, we believe rallies in prices are likely to be short-lived, as high inventory levels for both metals may continue to cap upside, as has been the case over the past decade.  Tactically, we see value below $1,400 and $670 for platinum and palladium respectively. We see little value in adding new longs above $1,500 and $750 in platinum and palladium respectively.  Metals may rally toward $1,700 and $800 – levels we see as unsustainable in the next 18 – 24 months.

3

Platinum and palladium are deficit markets, but…

01/10/2013

2

LBMA/LPPM Precious Metals Conference

4

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

 We expect 2013 global auto assembly to increase to 82.9m units, led by an expected 15% y/y in China (to 18.9m units) and the US adding 5% y/y (to 10.6m units). Importantly, gasoline vehicles are expected to maintain a market share of 78% in 2013.

2016F

2015F

2014F

2013F

-900

Palladium market balance ozs ('000) 1,800 900 0 -900 -1,800

2016F

2015F

2014F

2013F

2012

2011

2010

2009

-2,700

2008

 Robust demand, combined with the well publicized supply problems, should see both metals in deficit territory.

0

-450

2012

 We therefore expect palladium net autocat demand to increase to 5.3moz in 2013, 8% y/y. Total net demand for palladium is forecast at 7.7moz in 2013, representing yet another record level of demand.

450

2011

 As far as palladium is concerned, the key driver behind our palladium view remains palladium’s underlying use in gasoline autocats.

ozs ('000) 900

2010

 For 2013 we expect (excluding investment demand) growth in net demand for platinum of 3% y/y. We expect jewellery demand to remain robust into this year (5% y/y).

Platinum market deficit balance

2009

Outlook – still higher prices but not straightforward

 Market consensus is for both the platinum and palladium markets to remain in deficit. We too forecast deficits for these markets.

2008

China becoming more sensitive to the platinum price

We forecast deficits for platinum and palladium (so does the market)

Sources for graphs: SBG Securities; Standard Bank Research; JM

5

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough

China becoming more sensitive to the platinum price Outlook – still higher prices but not straightforward

Platinum ETF holdings vs price  There are many indicators which point to metal availability.  We have seen platinum ETF holdings rise by more than 700Kozs since May following the launch of the South African listed ETF in May.  Palladium has seen less inflows into ETFs, although YTD there were still more that 200Kozs added to the holdings of palladium ETFs.  Nevertheless, prices remain depressed in dollar terms. Both platinum and palladium is lower now than at the start of the year.  Even when considering the PGM basket price in rand terms, South African producers are struggling.

2,300

USD/ozs

ozs ('000)

2,100

1,800 1,650

1,900 1,500 1,700 1,350

1,500 1,300

Sep-13 Aug-13 Aug-13 Jul-13 Jul-13 Jul-13 Jun-13 Jun-13 May-13 May-13 Apr-13 Apr-13 Mar-13 Mar-13 Feb-13 Feb-13 Jan-13 Jan-13 Jan-13

But questions remain over loadings in China autocatalysts

Despite deficits, the market does not exhibit any tightness

ETF

1,200

Spot platinum

Palladium ETF holdings vs price 2,400

USD/ozs

ozs ('000)

800 750

2,100

700

1,950

650

1,800

600

Sep-13 Aug-13 Aug-13 Jul-13 Jul-13 Jul-13 Jun-13 Jun-13 May-13 May-13 Apr-13 Apr-13 Mar-13 Mar-13 Feb-13 Feb-13 Jan-13 Jan-13 Jan-13

2,250

Series1

Series2

Sources for graphs: Various ETF; Standard Bank Research; Bloomberg

01/10/2013

3

LBMA/LPPM Precious Metals Conference

6

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough

China becoming more sensitive to the platinum price Outlook – still higher prices but not straightforward

3m Lease rates - platinum  Neither the platinum nor palladium market are trading as tight markets which are about to enter a period of sustained and sizable deficits.

%

2.5

1.5

 Lease rates remain near zero, and sponge continues to trade at a discount to ingot for both platinum and palladium.  Not even during the extended strikes last year in South Africa, did the market seem to tighten.  Prices a struggling to move higher despite large deficit forecasts, very difficult production conditions in South Africa and improved growth prospects in especially the US and more lately Europe.

0.5

-0.5

-1.5

Jul-13 Jan-13 Jul-12 Jan-12 Jul-11 Jan-11 Jul-10 Jan-10 Jul-09 Jan-09 Jul-08 Jan-08 Jul-07 Jan-07 Jul-06 Jan-06 Jul-05 Jan-05 Jul-04 Jan-04

But questions remain over loadings in China autocatalysts

Lease rates and sponge discounts would suggest industrial users are not overly concerned

3m Lease rates - palladium 2.5

%

 This do raise questions: 1.5

•

•

Are the markets are deficits, or is real demand less than thought, or is recycling perhaps higher than we estimate? Is above-ground inventory more than we thought?

0.5

-0.5

Jul-13 Jan-13 Jul-12 Jan-12 Jul-11 Jan-11 Jul-10 Jan-10 Jul-09 Jan-09 Jul-08 Jan-08 Jul-07 Jan-07 Jul-06 Jan-06 Jul-05 Jan-05 Jul-04 Jan-04

-1.5

 We believe inventory is high.

Sources for graphs: Standard Bank

7

We estimate that above-ground inventory is high for both metals

01/10/2013

4

LBMA/LPPM Precious Metals Conference

8

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

Outlook – still higher prices but not straightforward

 Above-ground inventory for both metals may be higher than market consensus.  In fact, we believe the price behaviour of platinum and palladium is consistent with a market that calls for a PGM basket price that cuts into the cost curve in order to limit mine production.  Our estimate of above-ground inventory of platinum is 1,046 days of consumption, and 879 days of consumption for palladium.  Our estimates are on the bearish side; for both metals, they are higher than consensus.  Tactically, we believe that both metals should be traded rather than “bought-and-held” because inventory is likely to cap upside for longer than expected.  Such trading is likely to depend on market positioning rather than on absolute demand estimates.

Days consumption — Pt above-ground inventory Days 1,700

1,450

1,200

950

700

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

China becoming more sensitive to the platinum price

If markets are in deficits but prices not rising maybe inventory much higher than thought

Days consumption — Pd above-ground inventory Days 1,300

1,050

800

550

300

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Sources for graphs: Standard Bank Research

9

Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

Change in inventory = primary supply + recycling — consumption + net imports  The sum of the change in inventory over time provides us with a “minimum” estimate of above-ground inventory in that specific country.

0

So uth Ko rea

Ch ina

UK

Switzerlan d

Jap an

2012 2011

01/10/2013

5,000

2010 2009

 For palladium, Russian stockpiles may be less relevant.

10,000

2008 2007

 The US especially holds substantial volumes of palladium (and platinum). However, the UK, Switzerland, Japan and China also have some metal.

15,000

2006 2005

 Although data, especially demand data, pre1970s is very limited, our conclusion is similar — platinum and palladium inventories are high.

o z ('000)

20,000

2004 2003

 In order to cross-check our findings, we use a separate methodology, whereby we build a supply and demand series from various sources dating back to 1930.

25,000

2002 2001 2000

 As long as demand data consists of actual consumption estimates (such as ThomsonReuters GFMS), as opposed to implied consumption, double-counting should be avoided.

Platinum above-ground inventory by location

1999 1998

Outlook – still higher prices but not straightforward

 Our methodology:

1997 1996

China becoming more sensitive to the platinum price

If markets are in deficits but prices not rising maybe inventory much higher than thought

US

Palladium above-ground inventory by location o z ('000) 25,000

20,000

15,000

10,000

5,000

0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Contents

UK

Switzerland

Japan

US

Sources for graphs: Standard Bank Research

5

LBMA/LPPM Precious Metals Conference

10

Contents Platinum and palladium are deficit markets, but…

Platinum and palladium inventory Platinum above-ground inventory by methodology

ozs ('000)

o zs ('000)

We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough

25,000

24,000

20,500

20,000

16,000

16,000

11,500

12,000 7,000

2012

2011

2010

2009

2008

2007

2006

Historic data ap proach

Pt and Pd above-ground inventory vs. Gold ETF

2005

2004

2003

2002

2001

2000

1999

1998

Trada data approach

1997

8,000

1996

2012

2011

2010

2009

2008

2007

2006

2005

Histo ric data

2004

2003

2002

2001

2000

Outlook – still higher prices but not straightforward

1999

China becoming more sensitive to the platinum price

1998

1997

1996

But questions remain over loadings in China autocatalysts

Palladium above-ground inventory by methodology

Trada d ata ap proach

Pt and Pd above-ground inventory by owner

USD (billions)

o zs ('000)

160

25,000

20,000

120

15,000

80 10,000

40 5,000

0

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

Palladium above-ground inventory Platinum above-ground inventory Gold ETF holdings Silver ETF holdings

0 Platin um Other ETF holdings an d NYMEX

Palladium Possible strategic holdings Industry stockpiles

Sources for graphs: Standard Bank Research

11

Palladium recycling is set to rise, but probably not soon enough

01/10/2013

6

LBMA/LPPM Precious Metals Conference

12

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts China becoming more sensitive to the platinum price Outlook – still higher prices but not straightforward

China’s platinum demand - price sensitivity rising  Autocat demand accounts for 66% of total palladium demand.  Demand is fairly evenly split between regions, although growth in China has been strong since 2009.

Demand by application Jewellery, 445

Electrical, 1 200

 Recycling was equal to 23% of total demand in 2012.

Dental, 530

 Recycling holds to potential for large supply growth if prices move higher

Palladium supply by region

Other, 105

Investment, 470

Autocatalyst, 6 615

Chemical , 530

Autocat demand by region ozs ('000)

ozs ('000)

7 000

12 000

6 000

10 000

5 000 8 000 4 000 6 000

3 000

4 000

2 000

2 000

1 000

0

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Recycling - jewellery Zimbabwe South Africa

Recycling - autocats North America

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Rest of World

Others Russia

China

North America

Japan

Europe

Sources for graphs: Johnson Matthey

13

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough

 However, we estimate that that from 2018 the potential for palladium recycling will be rising fast as the current stock of vehicles in China ages.

ozs ('000) 6,000

4,500

3,000

1,500

2021F

2020F

Japan

2019F

2018F

US

2017F

2016F

China

2015F

Other

2014F

Outlook – still higher prices but not straightforward

2012

 This does open the metal to potential squeeze. Inventory drawdown for Pd – ozs (‘000)

2013F

0

2011

 Given our deficit forecasts, above-ground inventory estimates and recycling profile, we expect the palladium market to stabilise only in 2021.

Palladium recycling – substantial upside from 2018

2010

China becoming more sensitive to the platinum price

 We don’t believe China is recycling substantially more metal from autocats than what is currently reported.

2009

But questions remain over loadings in China autocatalysts

Palladium recycling – supply is coming, but it may be to late

Europe

Inventory drawdown for Pd – days consumption o zs ('000)

ozs ('000)

1,200

25,000 20,000

900

15,000 600

10,000 300

5,000 0

2021F

2019F

2017F

2015F

2013F

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

2019F

2017F

2015F

2013F

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

0

Sources for graphs: Standard Bank Research

01/10/2013

7

LBMA/LPPM Precious Metals Conference

14

But questions remain over loadings in China autocatalysts

15

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

Actual China autocat demand of palladium remains a question mark  However, looking more closely at the data, China may not be using as much palladium in their autocats than reported.  ThomsonReuters GFMS data would suggest that platinum and palladium loadings in Chinese produced vehicles sit around 2 grams per vehicle – with most of that 2 grams being palladium.

China vehicle production untis ('000) 20,000

15,000

10,000

5,000

2011

2012

2011

2012

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

China Pt and Pd loading per vehicle using GFMS Outlook – still higher prices but not straightforward

1998

0

China becoming more sensitive to the platinum price

1997

 This does look very reasonable compared to international standards

China gross autocatalyst demand ozs ('000) 1,600

1,200

800

400

0

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Platinum

Palladium

Sources for graphs: Standard Bank Research; China Customs; CAIN, ThomsonReuters GFMS

01/10/2013

8

LBMA/LPPM Precious Metals Conference

16

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

China net palladium imports

 However, China can get its metal from (1) imports, (2) recycling and (3) inventory

ozs ('000)

 We believe above-ground inventory of palladium in China is low. As a result, palladium supply is likely to be come from imports and recycling.  But while car production has gone up, palladium imports have gone down, and recycling is only marginally higher y/y.

60

30

Jul-13

Apr-13

Jul-12

Jan-13

Oct-12

Apr-12

Jul-11

Jan-12

Oct-11

Apr-11

Jul-10

Jan-11

Oct-10

Apr-10

Jul-09

Jan-10

0

Oct-09

China PGM loading per car using imports/recycling Outlook – still higher prices but not straightforward

90

Jan-09

 The numbers imply China’s loadings in vehicles are much less than thought.

120

Apr-09

China becoming more sensitive to the platinum price

Looking at China import data, it raises a question mark over loadings, and real consumption

China demand for palladium by application

g/unit

Jewellery, 240

3.00

Other, 10

Investment, 0

2.25 Electrical, 185

1.50

Dental, 0 Chemical , 215

0.75

Autocat, 1 255

0.00

Platinum

2012

2011

2010

2009 Palladium recycling

Palladium net imports

Sources for graphs: Standard Bank Research; China Customs; CAIN, ThomsonReuters GFMS; Johnson Matthey

17

China becoming more sensitive to the platinum price

01/10/2013

9

LBMA/LPPM Precious Metals Conference

18

Contents

China’s platinum demand - price sensitivity rising

Platinum and palladium are deficit markets, but…

 Unlike palladium, platinum has large exposure to jewellery demand.

We estimate that aboveground inventory is high for both metals

 China accounts for most of the world’s jewellery demand.

Palladium recycling is set to rise, but probably not soon enough

 Jewellery demand is more sensitive to price changes than autocat demand.

But questions remain over loadings in China autocatalysts

 Recycling (jewellery and autocats) accounted for around 20% of total demand in 2012.

China becoming more sensitive to the platinum price Outlook – still higher prices but not straightforward

Platinum demand by application Other, 340

Petroleum,  200

Autocatalyst,  3 240

Medical &  Biomedical,  235 Jewellery, 2  780

Chemical, 450

 As with palladium, we expect platinum recycling to rise.

Investment,  Glass, 180 455

Jewellery demand by region

Electrical, 165

Platinum supply

ozs ('000)

ozs ('000)

3 000

10 000

2 500

8 000

2 000

6 000

1 500

4 000

1 000

2 000

500

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0 2003

2004

2005

Rest of World

2006

2007

China

2008

2009

North America

2010

2011

Japan

Recycling - jewellery Zimbabwe

2012

Recycling - autocats North America

Others Russia

Europe Sources for graphs: Johnson Matthey

19

Contents

Platinum recycling and inventory Platinum recycling – substantial upside from 2019

Platinum and palladium are deficit markets, but…

 As with palladium, we believe platinum recycling will rise rapidly from 2019.

We estimate that aboveground inventory is high for both metals

 With the current deficit forecasts, inventory will be drawn down.

Palladium recycling is set to rise, but probably not soon enough

 However, looking at our inventory model and recycling profile, we believe the market will stabilise in 2019 as recycling picks up.

2021F

2020F

Japan

2019F

2018F

2017F

US

2016F

China

2015F

2014F

2012

2013F

0

Other

Inventory drawdown for Pt – ozs (‘000) Outlook – still higher prices but not straightforward

1,500

2011

China becoming more sensitive to the platinum price

3,000

2010

 In terms of days consumption, platinum will be less tight than palladium.

4,500

2009

But questions remain over loadings in China autocatalysts

ozs ('000) 6,000

Europe

Inventory drawdown for Pt – days consumption

ozs ('000)

ozs ('000)

25,000

1,800

23,000

1,500 1,200

21,000

900

19,000 600

17,000

300

15,000

2020F

2018F

2016F

2014F

2012

2010

2008

2006

2004

2002

2000

1998

1996

2020F

2018F

2016F

2014F

2012

2010

2008

2006

2004

2002

2000

1998

1996

0

Sources for graphs: Standard Bank Research

01/10/2013

10

LBMA/LPPM Precious Metals Conference

20

China’s platinum demand - price sensitivity rising

Contents

Evolution of China Pt inventory

 We pin China’s above ground inventory of platinum at the end of 2012 at 2.3mozs.

Platinum and palladium are deficit markets, but…

3,000

We estimate that aboveground inventory is high for both metals

 According to our estimates, most of the inventory has been accumulated since 2009, with inventory peaking in 2011.

Palladium recycling is set to rise, but probably not soon enough

1,000 0

 We have seen imports becoming much more price sensitive since 2012.

But questions remain over loadings in China autocatalysts

ozs ('000)

2,000

-1,000 -2,000

 We believe China is unlikely to by metal at any cost, but would wait for the right price.

China becoming more sensitive to the platinum price

-3,000 2009

China platinum imports pre- and post-2012 Outlook – still higher prices but not straightforward

2009 - 2011

320

270

230

80

190

1,500 Platinum price

2,000

150 1,400

USD

1,600

Platinum price

1,900

270

1,750

230

1,600

190

1,450

150

1,300

China imports 1,500

2012

Recycling Cumulative inventory

Jul-13 Jun-13 May-13 Apr-13 Mar-13 Feb-13 Jan-13 Dec-12 Nov-12 Oct-12 Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 Mar-12 Feb-12 Jan-12

160

0 1,000

ozs 310

ozs ('000) 310

240

2011

China platinum imports vs platinum price

2012 - current

ozs ('000)

2010

Net imports Demand

 This should remove demand at higher prices.

Plat price

1,700 Sources for graphs: Standard Bank Research

21

Outlook – still higher prices but not straightforward

01/10/2013

11

LBMA/LPPM Precious Metals Conference

22

Contents Platinum and palladium are deficit markets, but…

Platinum Key forecasts (thousands of oz) 2008

2009

2010

2011

2012

2013F

2014F

4,515

4,635

4,635

4,855

4,095

4,045

3,854

4,306

4,754

Russia

805

785

825

835

800

790

790

790

790

North America

325

260

200

350

295

292

289

285

Zimbabwe

180

226

280

340

340

398

459

468

468

Other

116

119

110

100

110

110

110

110

110

5,940

6,025

6,404

We estimate that aboveground inventory is high for both metals

South Africa

Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts

Total producer supply

Outlook – still higher prices but not straightforward

2016F

282

6,050

6,480

5,640

5,635

5,502

5,960

Recycled supply

1,130

830

1,085

1,225

1,130

1,212

1,289

1,384

Total supply

7,070

6,855

7,135

7,705

6,770

6,847

6,791

7,344

7,865

3,655

2,185

3,075

3,105

3,240

3,377

3,655

3,966

4,224

(1,130)

(830)

(1,085)

(1,225)

(1,130)

(1,212)

(1,289)

(1,384)

(1,461)

Gross autocatalyst Autocatalyst recovery

China becoming more sensitive to the platinum price

2015F

1,461

Net autocatalyst

2,525

1,355

1,990

1,880

2,110

2,165

2,366

2,582

2,763

Jewellery (net)

1,365

2,245

1,685

1,670

1,890

1,993

2,083

2,178

2,277

Chemical

400

290

440

470

450

459

468

478

487

Electrical

230

180

220

220

155

155

155

155

155

Fuel cells

0

0

0

0

0

0

0

0

0

Glass

315

10

385

555

180

180

180

180

180

Investment

555

660

655

460

455

342

0

0

0

Petroleum

240

210

170

210

200

204

208

212

216

Medical and biomedical

245

250

230

230

235

243

250

259

268

Other

290

190

300

355

340

345

349

354

359

Total demand

6,165

5,390

6,075

6,050

6,015

6,086

6,061

6,398

6,706

Surplus (deficit)

(225)

635

(25)

430

(375)

(451)

(559)

(438)

(302)

Price ($/oz)

1,611

1,208

1,612

1,722

1,553

1,503

1,650

1,850

1,975

Sources: SBG Securities; Standard Bank Research; Johnson Matthey

23

Contents Platinum and palladium are deficit markets, but… We estimate that aboveground inventory is high for both metals Palladium recycling is set to rise, but probably not soon enough But questions remain over loadings in China autocatalysts China becoming more sensitive to the platinum price Outlook – still higher prices but not straightforward

Palladium Key forecasts (thousands of oz) 2008

2009

2010

2011

2012

2013F

2014F

South Africa

2,430

2,370

2,640

2,560

2,330

2,313

2,252

2,604

2,806

Russia

3,660

3,635

3,720

3,480

2,880

2,700

2,600

2,600

2,600

North America

910

755

590

900

905

913

930

957

Zimbabwe

140

180

220

265

265

308

355

362

362

Other

170

160

185

155

165

167

168

170

172

Total producer supply

7,310

7,100

7,355

7,360

6,545

6,401

6,305

6,693

6,904

Recycled supply

1,140

965

1,310

1,655

1,660

1,779

1,901

2,080

2,149

8,450

8,065

Total supply Gross autocatalyst Autocatalyst recovery Net autocatalyst

8,665

9,015

8,205

8,180

8,207

2015F

8,773

2016F

964

9,053

4,465

4,050

5,580

6,155

6,615

7,115

7,826

8,609

9,256

(1,140)

(965)

(1,310)

(1,695)

(1,660)

(1,779)

(1,901)

(2,080)

(2,149)

3,325

3,085

4,270

4,460

4,955

5,336

5,924

6,528

7,106

Chemical

350

325

370

440

530

541

551

562

574

Dental

625

635

595

540

530

520

510

500

490

1,025

975

970

895

770

778

785

793

801 208

Electronics (net) Jewellery (net)

855

705

495

295

255

242

230

219

Investment (net)

420

625

1,095

-565

470

134

0

0

0

75

70

90

110

105

106

107

108

109

Other Total demand

6,675

6,420

7,885

6,175

7,615

7,657

8,108

8,711

9,288

Surplus (deficit)

635

680

(530)

1,185

(1,070)

(1,256)

(1,803)

(2,018)

(2,384)

Price ($/oz)

351

266

529

733

644

715

825

925

983

Sources: SBG Securities; Standard Bank Research; Johnson Matthey

01/10/2013

12

LBMA/LPPM Precious Metals Conference

Disclosure

24

Disclaimer THIS COMMUNICATION MAY CONTAIN RESEARCH. SUCH RESEARCH IS A MARKETING COMMUNICATION: It is not investment research as it is not the result of financial analysis and has not been prepared in accordance with legal requirements designed to promote investment research independence. Additional information with respect to any security referred to herein may be made available on request. This material is for the general information of institutional and market professionals’ clients of Standard Bank Group (SBG) only. Recipients who are not market professionals or institutional investor customers of SBG should seek advice of their independent financial advisor prior to taking any investment decision based on this communication or for any necessary explanation of its content. It does not take into account the particular investment objectives, financial situation or needs of individual clients. Before acting on any advice or recommendations in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The information, tools and material presented in this marketing communication are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This material is based on information that we consider reliable, but SBG does not warrant or represent (expressly or impliedly) that it is accurate, complete, not misleading or as to its fitness for the purpose intended and it should not be relied upon as such. The information and opinions contained in this document were produced by SBG as per the date stated and may be subject to change without prior notification Opinions expressed are our current opinions as of the date appearing on this material only. We endeavour to update the material in this report on a timely basis, but regulatory compliance or other reasons may prevent us from doing so. SBG or its employees may from time to time have long or short positions in securities, warrants, futures, options, derivatives or other financial instruments referred to in this material. Where SBG designates research material to be a “marketing communication”, that term is used in SBG’s Research Policy. This policy is available from the Research Compliance Office at SBG. SBG does and seeks to do business with companies covered in its research reports including Research Communications. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. SBG has published a Conflicts of Interest Policy that is available upon request which describes the organisational and administrative arrangements for the prevention and avoidance of conflicts of interest. Further disclosures required under the FCA Conduct of Business Sourcebook and other regulatory bodies are available on request from the Research Compliance Department and or Global Conflicts Control Room, unless otherwise stated, share prices provided within this material are as at the close of business on the day prior to the date of the material. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of SBG. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of SBG or its affiliates. SBG believes the information and opinions in the Disclosure Appendix of this report are accurate and complete. Information and opinions presented in the other sections of this communication were obtained or derived from sources SBG believes are reliable, but SBG makes no representations as to their accuracy or completeness. Additional information is available upon request. SBG accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that liability arises under specific statutes or regulations applicable to SBG. The services, securities and investments discussed in this material may not be available to nor suitable for all investors. Investors should make their own investment decisions based upon their own financial objectives and financial resources and it should be noted that investment involves risk, including the risk of capital loss. Past performance is no guide to future performance. In relation to securities denominated in foreign currency, movements in exchange rates will have an effect on the value, either favourable or unfavourable. Some investments discussed in this marketing communication have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment, in such circumstances you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make them investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realize those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed.

Disclosure (continued)

25

This report is issued and distributed in Europe Standard Bank PLC. 20 Gresham Street, London EC2V 7JE which is regulated in the United Kingdom by Prudential Regulation Authority (“PRA”). This report is being distributed in the United States by Standard New York Securities (USA) LLC; in Kenya by CfC Stanbic Financial Services Ltd; in Nigeria by Stanbic IBTC; in Angola by Standard Bank de Angola S.A.; in Brazil by Banco Standard de Investimentos S.A.; in China by Standard Resources (China) Limited; in Australia by Standard Bank Plc – Sydney branch; in Botswana by Stanbic Bank Botswana Limited; in Democratic Republic of Congo by Stanbic Bank Congo s.a.r.l.; in Ghana by Stanbic Bank Ghana Limited; in Iran by Standard Bank Plc – representative office; in Isle of Man by Standard Bank Isle of Man Limited; in Jersey by Standard Bank Jersey Limited; in Mexico by Standard Bank Plc – representative office; in Madagascar by Union Commercial Bank S.A.; in Mozambique by Standard Bank s.a.r.l.; in Malawi by Standard Bank Limited; in Namibia by Standard Bank Namibia Limited; in Mauritius by Standard Bank (Mauritius) Limited; in Peru by Standard Bank Plc – representative Office; in Taiwan by The Standard Bank of South Africa; in Tanzania by Stanbic Bank Tanzania Limited; in Singapore by Standard Merchant Bank (Asia) Limited; in Swaziland by Standard Bank Swaziland Limited; in Zambia by Stanbic Bank Zambia Limited; in Zimbabwe by Stanbic Bank Zimbabwe Limited; in UAE by Standard Bank Plc – Dubai branch

In jurisdictions where SBG is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. Standard Bank Group Ltd Reg.No.1962/000738/06) is listed on the JSE Limited. It is an Authorised Financial Services Provider and it also regulated by the South African Reserve Bank. Copyright 2013 SBG. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Standard Bank Group Ltd.

01/10/2013

13