Despite the sharp decline in platinum prices since September 2008, the demand for platinum is rising in a range of industrial applications, a consulting firm said on Tuesday.

"With over one billion ounces in reserves, South Africa's platinum mining industry has probably the strongest outlook of any mining sector in the country," Frost & Sullivan said in a statement.

South Africa's platinum production declined sharply from the 5.22 million ounces produced in 2007 to 4.53 million ounces in 2008.

Output was however expected to climb to an estimated 5.70 million ounces in 2014.

"The country's platinum production will face more declines in the short term due to operational, resource and other constraints."

Despite the limited upside potential for platinum prices in the short to medium term, the country's platinum mining industry was poised to enjoy phenomenal growth once the effects of the global economic slowdown started lifting.

"South Africa's platinum mining companies need to position themselves to be able to respond swiftly to changes in the global economy."

Small and medium-sized platinum mining companies would contribute significantly to South Africa's platinum production output over the next five years through "strategic alliances".

One of the greatest problems facing the country's platinum miners was to contribute to the government's efforts of ensuring sustainable development amongst communities affected by mining.

Sapa

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