JOHANNESBURG (miningweekly.com) – South Africa's Department of Trade and Industry (DTI) is giving serious consideration to the creation of a Special Economic Zone (SEZ) for platinum development.

DTI director-general Lionel October tells Mining Weekly Online that a DTI team is working with the participants to determine the economic viability of establishing a central platinum hub with satellites to allow for locational flexibility.

“Some of the provinces and our local companies have been working on moving into the commercialisation of fuel-cell technology, so definitely this could be one area that we designate an SEZ,” says October (see also attached video).

The South African government is hoping its new SEZs Bill and policy will create the framework for the development of new industrial nodes outside of the traditional industrial heartlands.

Platinum has been identified as one of South Africa’s strategic minerals as the overwhelming bulk of the world’s deposits are in South Africa and neighbouring Zimbabwe.

“There have been major developments in terms of diversifying the sources of demand for platinum, especially in the general area of energy and fuel cells,” October tells Mining Weekly Online.

Anglo American CEO Cynthia Carroll told the United Nations climate change convention’s seventeenth Conference of the Parties (COP 17) in a forceful speech in Durban that the window of opportunity was “wide open” for South Africa to create “hundreds of thousands of new jobs" and simultaneously obtain a source of clean "zero-emission electricity” by developing fuel cells in this country.

Anglo American, through the JSE-listed Anglo American Platinum (Amplats), is the world’s largest producer of platinum, which is used as a catalyst in fuel cells.

“With platinum at its heart, a fuel-cell industry would support South Africa’s drive for jobs,” Carroll added.

Amplats market development and research head Anthea Bath told Mining Weekly Online on Monday that the company intended putting a fuel-cell powered mine locomotive through its paces at the Dishaba platinum mine, in Limpopo province, in March/April.

The purpose of the demonstration would be to show that fuel-cell powered locomotives provided superior efficiency and productivity and offered underground transport that had zero emission.

Last year Amplats unveiled a pioneering clean-energy fuel-cell power plant that reforms coal-bed methane gas into hydrogen to produce both electricity and heat, at 83% efficiency.

Fuel cells are currently seen as being poised to play an imminent role in both vehicle and stationary applications worldwide.

Their use provides a significant platinum extraction opportunity for the mining industry as well as a local manufacturing, installation, maintenance and job-creating opportunities for South Africa as a whole.

A relatively moderate niche penetration of the fuel cells into the huge global energy market is calculated to be able to drive substantial platinum demand.

October makes the point that South Africa’s SEZs must be designed to offer quality infrastructure, and that the incentives that go with them must be seen as "top-ups" rather than their central theme.

“Investors must be able to see a complete long-term business opportunity in the zones and that’s why quality infrastructure is critical,” says October.

Beneficiation is now firmly on the national agenda and the DTI is studying innovative ways of attracting a bigger part of the platinum industry to South Africa.

Simultaneously, manufacturers the world over are wanting to base their production closer to their sources of raw material supply in order to lower their carbon footprints.

“If we get the first mover, we'll get the agglomeration,” October comments to Mining Weekly Online.

Leading automotive companies have been investing in fuel cells to a point where these engines of the future have emerged from the research-and-development phase into the commercialisation and industrialisation phases.

“We’re at a nexus point that, if we do the right thing now, we can take fuel cells to a slightly higher level,” adds October.

A prime location is being sought for the creation of a kind of ‘Platinum Valley’ that emulates the great Silicon Valley success of the US.

Some public transport abroad is already fuel-cell driven, as are a growing number of forklift trucks.

South Africa’s Department of Mineral Resources (DMR) has identified platinum as a candidate for value-chain development, backing up disparate research work for decades by the likes of platinum promoter Johnson Matthey.

The DMR says that alternative forms of energy, such as platinum-group metals (PGMs) fuel cells, present an opportunity for South Africa to become a prominent player in global manufacturing and distribution of fuel-cell components.

A platinum-using catalytic converter company, which currently does the bulk of its manufacture in Japan, says that a 10% price preference as part of the beneficiation strategy will be sufficient to attract it to set up a manufacturing facility in South Africa.

In August last year, Amplats, through the first investment of its Platinum Group Metals Development Fund (PGMD Fund), and US-based Altergy Systems announced that it would be partnering South Africa’s Department of the Science and Technology (DST) to establish a new company, Clean Energy Incorporated, to market and distribute fuel cells in South Africa, followed by the local manufacture of fuel cells for the sub-Saharan African market by 2013.

Both the DST, through the Technology Innovation Agency, and the PGMD Fund, pledged to invest in the transaction and, along with Altergy, each receive equity in Clean Energy, which would obtain its PGMs for fuel-cell manufacturing at market-related prices.

Fuel cells use mainly hydrogen, but also ammonia or liquid petroleum gas, to generate electricity, with water the byproduct.

Amplats CEO Neville Nicolau makes the point that market development is required to ensure the use of platinum for the life of the company’s mines.

Fuel cells can be used in a wide range of applications. Besides their use to drive vehicles, the scope to use stationary fuel cells for power generation is wide, particularly in far-flung off-grid locations.

The telecommunications sector will be one of Clean Energy’s first target markets, with fuel cells able to generate power, or backup power, for cellphone towers.

Small fuel cells power cellphones and potentially miners’ caplamps, or they can consist of bigger systems to power buildings.

Amplats demonstrated a 150 kW zero-emission fuel cell close to the COP 17 conference venue to highlight platinum’s green credentials and its role in lowering carbon emission.

Altergy chairperson Terry Carlone has made the point that fuel cells can be produced in large volumes and at low cost, using a high degree of automation.

Science and Technology Minister Naledi Pandor has stated that the local manufacture of fuel cells is in line with the government’s National Hydrogen and Fuel Cells Research, Development and Innovation Strategy, the ultimate goal of which is to supply 25% of the world catalyst demand by 2020.

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