Virtual Metals has been selected to examine the potential viability of a South African metals exchange.

The consultancy will examine the potential for the exchange, which has long been mooted by a mixture of economists and ministers in Africa.

The firm will also evaluate what the impact would be on local producers and other figures in the precious metal supply chain, identifying areas for development and how to ensure that countries make the most out of their natural resources.

Jessica Cross, chief executive of Virtual Metals, told Mineweb that they had been charged with finding out whether an exchange could be sustained.

"We have to ask the question: 'is there room for another commodities exchange?'" she explained.

Ms Cross says that the possibilities for beneficiation were good, but stressed the key was determining how influential the Johannesburg Metals & Commodities Exchange (JMEX) could be amid existing exchanges such as COMEX, NYMEX and the London Metal Exchange.

Platinum and palladium will join aluminium, ferrochrome and gold, as those metals covered by Virtual's study.