The South African Department of Mineral Resources (DMR) says domestic sales of platinum-group metals (PGMs) are expected to increase as government intensifies its strategy to increase the local beneficiation of mineral resources.

Speaking exclusively to Mining Weekly, DMR chief mineral economist for precious metals Donald Moumakwa indicates that a small percentage of local PGM production is beneficiated in South Africa, which challenges the department’s aim of ensuring that the country derives maximum value from its abundant PGM resources.

“The PGM industry is still very much export-orientated, with about 85% of the metals leaving the country. The bulk of these are headed for the catalytic converter and fuel cell industries, as mitigating opportunities are accelerated in response to climate change threats,” he says.

Further, South African Mineral Resources Minister Susan Shabangu said at the 2011 Mining Ministers’ Forum, in China, in November, that a beneficiation strategy had been approved by the South African Cabinet in June last year.

This strategy seeks to provide a framework to translate the country’s vast PGM endowment into a competitive advantage for the downstream mineral beneficiation industries.

“By developing mineral value chains to these levels, our country’s industrial base will be deepened and broadened to contribute to the diversification of mineral activities away from traditional commodities and nontradable services,” she said.

Meanwhile, Moumakwa points out that while PGM production increased steadily from the first to the third quarters of 2011, and while this trend is expected to continue into 2012, the effects of the 2008 financial crisis are still apparent, as the number of PGM projects cur- rently under way are far fewer than before the crisis.

However, DMR acting director of mineral economics Nyakallo Dlambulo argues that the largest user of PGMs, the automotive sector, has shown signs of recovery from the 2008 downturn, which has translated into increased demand for PGMs.

“As the number of vehicles on the road increases, further emissions reduction measures for these vehicles are demanded in response to increasingly stringent emissions standards. This provides South Africa with increased PGMs demand from the catalytic converters industry,” she says.

In addition, with global energy demand expected to grow by more than 60% by 2030, the security of energy supply has become a concern and has led to the diversification of energy sources.

For South Africa, this has created new opportunities for PGMs in the development of fuel cell technology, which uses platinum as a catalyst, and which is perceived as a clean energy provider.

“The potential impact of fuel cells for South Africa goes beyond energy diversification, as it will result in job creation in terms of manu- facturing and installation maintenance, as well as skills development. This, in turn, could lead to significant socioeconomic development,” Dlambulo says.

She emphasises that current PGM industry challenges are being tackled by the exploration team of the DMR’s Mining Industry Growth, Development and Employment Task Team, which is investigating intervention mechanisms to deal with identified challenges across the PGM industry and other mining exploration sectors.

Meanwhile, Moumakwa is optimistic about local PGMs, noting that, based on current production rates and known reserves, the exploitation of South Africa’s PGM resources is expected to continue for at least another 250 years.

He adds that this should inspire confidence in terms of exploration and new mine developments for the purpose of sustainable PGM supply.

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