The past year has been remarkable because expectations that boom conditions could last longer than expected resulted in a feeding frenzy as the major producers pounced on select takeover targets among the platinum explorers.

The industry was once famously described by Aquarius Platinum CEO Stuart Murray as consisting of "three 600-pound gorillas and a whole lot of rats and mice scurrying around, of which Aquarius likes to think of itself as King Rat."

Two of the "gorillas" - Lonmin and Impala Platinum (Implats) - are now openly throwing their weight around, picking off the most likely looking of the rats and mice to help meet their medium- and long-term growth targets.

The third and largest gorilla is Anglo Platinum and it faces a different problem - to decide which of its portfolio of projects will be next to get the go-ahead.

Those decisions are closely linked to the group's negotiations with the department of minerals & energy (DME) for conversion of its "old order" mining rights to "new order" mining rights. Which of the rats and mice will benefit depends on which projects Anglo Platinum eventually decides to go ahead with and in what timeframe.

Background to the feeding frenzy under way can be gleaned from the 2007 Platinum & Palladium Survey published by UK metals and minerals consultancy GFMS. The report predicts platinum will reach US$1 450/oz before year-end and that, overall, the market will remain in balance.

At end-April platinum sat around $1 300/oz and the report predicts enough consumer demand for the metal to "avoid a fall below $1 150/oz".

That's despite the survey's findings that the platinum market moved into a marginal supply surplus of 145 000 oz in 2006 - the first surplus in eight years. GFMS also expects 2007 will end up showing a larger surplus.

The two pillars of the platinum business are jewellery and autocatalysts, which use platinum to clean up vehicle exhaust emissions. Though jewellery demand has suffered because of rising prices, autocatalyst demand continues to rise steadily.

This is because increasing numbers of vehicles are being sold as well as the constant tightening of emission control standards.

Two juniors were picked off last year in multibillion rand deals. Lonmin took over Canadian-listed AfriOre for R3bn in cash, while Implats made a R4,2bn cash bid for London-listed junior African Platinum (Afplats).

The overall result of this activity has been an explosion in the price levels of the various junior platinum companies listed on the JSE, the Toronto Stock Exchange (TSE) and London's Alternative Investment Market (AIM). This is because investors are speculating on which will be the next target in the consolidation of the platinum sector.

The viability of many of the projects being promoted by these junior operators had until recently been viewed with scepticism by analysts and fund managers. No longer.

The fact that the majors are prepared to lay out billions of rand to acquire the likes of AfriOre's Akanani project and Afplats' Leeuwkop project has given the sector a lot more credibility.

The most dramatic share price performance has come from Wesizwe Platinum (Wesizwe) which got off to a disastrous start when listed on the JSE in December 2005. The share price collapsed from 600c to 275c within days and languished there until bottoming at 200c in September. Wesizwe stock then took off from January this year, hitting R11 by March and R14,80 in April.

Canadian explorer Anooraq, dual-listed on the JSE and TSX, has followed a similar pattern over a much shorter time. Anooraq listed in December at R14,80 but promptly dropped to 750c by mid-January before taking off to hit a series of new highs, reaching R18,90 in late April.

Turning to foreign stock exchanges, TSX-listed Platinum Group Metals (PTM) doubled from C$1,50 last October to C$3,00 by end-February and reached C$3,58 by the end of April.

In London, AIM-listed Ridge Mining doubled from around 40p in October to 80p in March, reaching 150p by the end of April before pulling back slightly as management raised funds through a share placing.

What all these companies have in common is that they either have agreements in place with Anglo Platinum and/or hold ground adjacent to Anglo Platinum-controlled projects.

PTM and Wesizwe are assessing separate platinum mines near Sun City on the western limb of the Bushveld Complex but also hold some ground jointly with each other and with Anglo Platinum. The Bushveld Complex is the host geological formation for the platinum-bearing Merensky and UG2 reefs.

Anglo Platinum's operating Bafokeng Rasimone mine is located nearby as is the group's Styldrift/Bafokeng JV. There has long been speculation over some kind of tie-up between the three in the region, given the common-sense assumption that it would be cheaper and more efficient to establish one common infrastructural base rather than three separate sets of mining and processing assets. The first development took place in April when Wesizwe took over PTM's BEE partner.

Anooraq has JVs with Anglo Platinum at Boikgantsho on the Platreef, north of Anglo Platinum's existing Potgietersrust Platinum mine and also at Ga-Pasha on the eastern limb of the Bushveld Complex.

Ridge has two projects - Sheba's Ridge and Blue Ridge - with Anglo Platinum being a JV partner in Sheba's Ridge. Of particular interest here is that Sheba's Ridge will be a major nickel operation producing around 24 000 t/year of nickel in addition to 390 000 oz/year of platinum group metals (PGM) if it gets the go-ahead.

That means it may make sense for Ridge to build its own PGM smelter/refinery complex instead of having its production toll-treated by the majors as is the norm.

Owning a smelter/refinery complex independently of the three majors would give Ridge a powerful position in the future consolidation of the platinum sector. The drawback is the cost, which could run to US$1bn, but Ridge CEO Terence Wilkinson says the group has two shareholders with deep pockets. These are the IDC - which is tasked with promoting strategic industrial developments in SA - and Chinese gold and base metal group Zijin Mining, which is keen to tie up sources of metal and will invest in the right kind of projects to do so.

Analysts reckon Implats' driving motivation in grabbing Afplats was to secure a strategically large platinum resource close to existing mines around Rustenburg, given the deteriorating situation in Zimbabwe where the group had been looking for major growth.

Implats is pushing ahead with the expansion of its Zimbabwe operations held through Zimplats but has scaled them back. The group will spend R1,4bn to push production from the current 90 000 oz/year to 160 000 oz/year, but Implats was originally looking at a larger expansion to push production to 345 000 oz/year at a cost of nearly R5bn.

Anglo Platinum this year finally made some progress on holding down the rate of escalation in its working costs, which had so marred its performance in previous years.

Lonmin, the world's third-largest producer, trumped its larger competitors when it became the first platinum major to achieve conversion of its existing "old order" mining rights into "new order" mining rights.

The key issue appears to have been the attention paid by Lonmin to the social and labour plan issues in its application. Lonmin CEO Brad Mills underscored the importance of this in March when he announced a ground-breaking deal with the International Finance Corp (IFC) through which the IFC agreed to provide $100m up-front in funding for Lonmin's future BEE partners.

The reason, according to IFC executive Rashad Kaldany, was that "we struck up a good rapport with Lonmin management. They have gone a long way to demonstrate their commitment through actions on the ground. We felt we could build on that and also learn from Lonmin."