South African mineral production increased by 8.1 per cent year-on-year for the three months to the end of May driven by staggering growth in the production of platinum group metals (pgms).

It means that for the first time, pgms are now the highest weighted mineral group in the South African government's mining production and sales index.

According to Mineweb, South Africa supplied almost 78 per cent of the world's platinum in 2003, which helped pgms soar to 169.2 on the index from 122 points in the comparative three-month period last year.

The platinum survey released by Johnson Matthey earlier this year explained that demand for the metal exceeded supply by 280,000 ounces in 2003.

However, this deficit should close this year as more platinum mines in South African start producing.

"Total supplies of platinum are projected to rise significantly faster than demand this year," Johnson Matthey predicted in the survey.

"South African output is likely to exceed 5 million ounces as more metal flows from expansion projects at most of the existing producers."