Costs are a touchy subject - all producers want to say they are in the "bottom half" of the industry cost curve and, preferably, in the "lowest quartile".
Getting a clear cost comparison between producers can be tricky, particularly in industries like nickel and platinum where different accounting procedures are applied.
Anglo American Platinum (AngloPlat) now reports its working costs in two sets, one for "steady state" mines and one for mines that are starting up or being expanded.
Unit working costs tend to be much higher on the new operations until they reach full output. Combining them with the results from the other mines yields an unfavourably high overall working cost figure for accurate comparisons - at least that's AngloPlat management's story and it is sticking to it.
Competitor Impala Platinum (Implats) retorts that it does not split up its costs in this way, so the overall cost figure shows what is really going on at its operations.
Aside from the debate over which company has the highest costs in the industry - in SA that's Northam Platinum - an interesting issue now developing concerns the costs of building a new platinum refinery in SA.
Getting an accurate assessment could be vital for some of the newcomers now intent on entering the platinum game.
Refining platinum is a complex process and takes a lot longer than recovering and refining gold. There are large upfront capital costs in building the refineries and a considerable lock-up of working capital in the recovery process.
Implats justified the building of an entirely new precious-metals refinery complex on a combination of better recovery efficiencies and faster processing times. The new refinery recovers platinum in 22 days and rhodium in 100 days, compared with 45 days and 130 days respectively in the old refinery.
Newcomers to the business such as Aquarius and Southern Era have so far avoided these refining costs by entering toll-refining agreements. They produce a concentrate which is treated in the refineries of Implats or AngloPlat.
That reduces the newcomer's start-up capital cost as well as the refining risk - but at a cost, which is that the refiner takes a slice of the newcomer's profits for its services. The newcomer is, in effect, a contract miner for the major.
Cluff Plc chief operating officer Terence Wilkinson is now challenging this concept by suggesting that Cluff may build its own smelter and refinery.
Wilkinson, who ran Lonmin before taking early retirement, says the platinum majors are talking to their own book in playing up the difficulties involved in platinum refining.
The argument for and against his position is raging. But look at what happened to Avmin when its Chambishi copper smelter in Zambia ran into technical trouble and production was delayed by a year.
Avmin was forced to sell out because it did not have the financial resources to cope with the delay. Established platinum producer Lonmin, on the other hand, was able to survive an explosion that shut down its smelter.
