Xstrata will face significant barriers to achieving its proposed expansion aims in the platinum sector, it has been claimed.

The diversified miner is to formally enter the platinum sector with the acquisition of Eland Platinum in a $1 billion deal and has said it is looking to become one of the world's largest platinum producers.

However, according to Brad Mills, Chief Executive at Lonmin Platinum, the firm will face an uphill struggle as it seeks to grow its market share.

He told Mining Weekly: "If you follow the platinum sector, then you will know that it's an incredibly difficult sector to get much traction in.

"It's not an easy market, obviously, to really grow significant volumes in, because so much of the ground is already held by others."

Mr Mills also predicted that the effect of the firm's entry into the platinum sector will push up prices of platinum juniors in the knowledge that these will be further targets for takeovers by Xstrata.

Sources:

New platinum entrant will have to work hard to grow volumes - Lonmin, 15/11/07
http://www.miningweekly.co.za/article.php?a_id=121254

South African authorities back Xstrata takeover of Eland Platinum, 14/11/07
http://afp.google.com/article/ALeqM5jZGH9woywXkRoDVIE5bDOKeXcfPw

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