The platinum price has fallen through the floor and, as I write this column, it remains in the doldrums.
Last week’s platinum price collapse to $893/oz had warning bells ringing loudly and what is essential now is for steady hands be placed on the industry’s tiller to navigate towards sustainability.

While a lower-for-longer price environment had been anticipated, the expectation along many company corridors was that the price trend would more likely head up and begin getting closer to the gold price’s $1 200/oz range, which is really nothing to write home about for an industry that really needs a considerably higher price.

As long ago as February 2012, then Anglo American Platinum (Amplats) CEO Neville Nicolau was unequivocal about a platinum price of $1 900/oz being essential for the capital investment required to maintain long-term production.

Instead, deep, labour-intensive mines are operating at dollar prices that not even the weak rand is helping.

Well ahead of the latest price decimation, platinum company CEOs were expressing concern about the lossmaking position of many mines, even in the opencast space.

“Something will have to change dramatically,” the head of one opencast platinum operation told Mining Weekly last month, well ahead of the latest price crunch.

He was speaking against the background of Bank of America Merrill Lynch (BofAML) telling the Prospectors and Developers Association of Canada (PDAC) convention, in Toronto, earlier this year that the platinum price would rally if platinum producers cut supply by 300 000 oz to 400 000 oz.

BofAML charged, at the well-attended PDAC, that the blame for the lack of supply discipline lay especially at South Africa’s door.

“As an industry, we need to go for it. We must be bold about cutting supply. The price is telling us that we’re in oversupply and we’ve got to react,” Lonmin CEO Ben Magara commented to Mining Weekly on the supply issue last month.

Embattled platinum requires ongoing marketing, particularly to ensure that the metal does not continue to be demonised by the antidiesel hype, Royal Bafokeng Platinum (RBPlat) CEO Steve Phiri told investors, unionists, analysts and journalists earlier this year.

“You’ve got to market and market and market,” the RBPlat CEO told Mining Weekly in an interview immediately afterwards.

Against this background, the International Platinum Association was formed and has canvassed eurozone authorities on the efficacy of platinum-catalysed diesel engines, which are fitted with gadgets to halt nitrogen oxide (NOx) emissions.

The mayors of the world’s biggest cities, led by three-times New York mayor Michael Bloomberg, have been pushing hard for clean NOx-free air around major cities, which platinum is able to deliver.

The World Platinum Investment Council has been expanding access to platinum investment and there have been many calculations that point to a deficit of primary supply.

But the platinum price still stubbornly refuses to return to sustainable levels.